MGT 340 Flash Card, Quiz, and Notes from PPT
chapter 1 Flash card
morals
Definition:
A person’s personal philosophies about what is right or wrong. Personal philosophies that define right
and wrong.
Business ethics
Definition:
Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
Principles
Definition:
Specific and pervasive boundaries for behavior that should not be violated
Values
Definition:
Enduring beliefs and ideals that are socially enforced
workplace integrity
Definition:
the pressure to compromise organizational standards, observed misconduct, reporting of misconduct when observed, and retaliation against reports.
moral dilemma
Definition:
two or morals in conflict with one another
value dilemma
Definition:
two or more beliefs/ideals in conflict with one another
Consumers’ Bill of Rights
Definition:
From President John F. Kennedy’s 1962 “Special Message on Protecting the Consumer Interest” that outlined four basic consumer rights: the right to safety, the right to be informed, the right to choose, and the right to be heard
corporate social responsibility
Definition:
An organization’s obligation to maximize its positive impact on stakeholders and minimize its negative impact
Defense Industry Initiative on Business Ethics and Conduct
Definition:
Developed to guide corporate support for ethical conduct
Federal Sentencing Guidelines for Organizations
Definition:
Approved by Congress in November 1991, set the tone for organizational ethical compliance programs in the 1990s
Sarbanes–Oxley Act
Definition:
The most far-reaching change in organizational control and accounting regulations since the Securities and Exchange Act of 1934, which made securities fraud a criminal offense and stiffened penalties for corporate fraud
Dodd–Frank Wall Street Reform and Consumer Protection Act
Definition:
Addressed some of the issues related to the financial crisis and recession and designed to make the financial services industry more ethical and responsible
ethical culture
Definition:
Acceptable behavior as defined by the company and industry. Organizational principles, values, and norms that are adhered to by the
company and its personnel.
Sustainability: Relates specifically to the environment (air, land, and water).
Global Compact
Definition:
set of 10 principles concerning human rights, labor, the environment, and anti-corruption; the purpose is to create openness and alignment among business, government, society, labor, and the United Nations
pre quiz
What concept refers to a person’s personal philosophy about what is right or wrong?
a. principles b. business ethics c. morals d. values e. philosophy
c. morals
Some examples of what concept can include human rights, freedom of speech, and the fundamentals of justice?
a. philosophy b. business ethics c. values d. morals e. principles
e. principles
The Consumers’ Bill of Rights decreed by President John F. Kennedy specified all of the following EXCEPT the right to _____.
a. be heard b. safety c. to choose d. be informed e. freedom
e. freedom
Before anything else, businesses must _____ to survive.
a. make a profit b. have a great reputation c. sell internationally d. compensate their employees well e. be popular
a. make a profit
An organization that has a strong ethical environment usually has a core value of placing _____ interests first.
a. customers' b. competitors' c. management's d. government's e. stockholders'
a. customers’
An organization’s obligation to maximize its positive impact on stakeholders and to minimize its negative impact refers to its _____.
a. moral justice b. regulation mandate c. ethical dilemma d. consumerism e. social responsibility
e. social responsibility
The concept that centers around enduring beliefs and ideals that are socially enforced, such as teamwork, trust, and integrity is called _____.
a. philosophy b. principles c. business ethics d. morals e. values
e. values
The concept in the chapter that is defined as a situation where the person is faced with multiple choices, all of which are undesirable as defined by the person is called a _____.
a. moral dilemma b. philosophical analysis c. value turpitude d. principle decision e. value crisis
a. moral dilemma
Many studies have found a positive relationship between which of the following?
a. high levels of government regulation and cultural values b. unmotivated employees and good business performance c. apathetic boards of directors and an ethical culture d. an ethical culture and good business performance e. high cultural values and low industry competition
d. an ethical culture and good business performance
The term ethical culture is associated with all of the following except _____.
a. acceptable behavior as defined by the company and industry b. maximizing profits and placing shareholder's first c. positively related to workplace confrontation over ethics issues, reports to management of observed misconduct, and the presence of ethics hotlines d. the component of corporate culture that captures the values and norms an organization defines and is compared to by its industry as appropriate conduct e. culture that creates shared values and support for ethical decisions and is driven by the ethical leadership of top management
b. maximizing profits and placing shareholder’s first
The _____ is a set of 10 principles concerning human rights, labor, the environment, and anti-corruption. This document seeks to create openness and alignment among business, government, society, labor, and the United Nations.
a. MERCOSUR b. CERES Principals c. Global Compact d. The Sullivan Principals e. NAFTA
c. Global Compact
The term that comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business is defined as _____.
a. business ethics b. principles c. philosophy d. morals e. values
a. business ethics
According to the text, business ethics comprises organizational principles, values, and __________ that may originate from individuals, organizational statements, or from the legal system.
a. norms b. meanings c. morals d. laws e. directions
a. norms
The ethical component of a corporate culture relates to the values, beliefs, and established and enforced patterns of conduct that employees use to identify and respond to ethical issues.
a. True
b. False
a. True
The Sarbanes–Oxley Act made it illegal for U.S. businesses to issue bribes to foreign government officials.
a. True
b. False
b. False
chapter 1 Notes from PPT
Bottom Line for Business Ethics
• Firm survival
• Profitability, revenues, sales
• Stakeholders: customers, employees, channel
members (manufacturers, wholesalers, retailers)
• Contribute to societal goals: community, country, world
Why Study Business Ethics?
• Identify ethical issues.
• Recognize approaches for resolving ethical
issues.
• Cope with conflicts between your own personal
values and those of the organization in which you
work.
• Gain knowledge to make more ethical business
decisions.
The Process of Legal to Unethical to Illegal Business Practice:
Steps in the process:
1. A major event occurs that negatively sensitizes the
public to business practice.
2. The public uses social media to increase
awareness.
3. Legislators (local, state, and federal) become
sensitized to the negative business practices.
4. Bills, laws, and local, state, or federal agencies are
introduced to make specific items illegal or regulated.
The Benefits of Business Ethics:
• Ethics Contributes to Employee Commitment
• Willingness to sacrifice for the organization.
• Increases group creativity and job satisfaction;
decreases turnover.
• Less pressure to compromise ethical standards,
• Greater absence of misconduct.
• Strong community involvement increases loyalty
and positive self-identity.
• Ethics Contributes to Investor Loyalty
• Provides a foundation for efficiency, productivity,
and profits.
• Negative publicity, lawsuits, and fines can lower
stock prices, diminish customer loyalty, and
threaten a company’s long-term viability.
• Demand for socially responsible investing is
increasing.
• Ethics Contributes to Customer Satisfaction
• High levels of perceived corporate misconduct
decreases customer trust.
• Companies viewed as socially responsible
increase customer trust and satisfaction.
• Consumer respondents stated they would pay
more for products from companies that give back
to society in a socially responsible and
sustainable manner.
• Ethics Contributes to Profits
• Better business performance.
• Part of strategic planning toward obtaining the
outcome of higher profitability.
• Business ethics is becoming more than just a
function of compliance; It’s becoming an integral
part of management’s efforts to achieve
competitive advantage.
T/F
Business ethics focuses mostly on personal ethical issues.
F
Business ethics focuses on organizational concerns (legal and ethical—employees, customers, suppliers, society, and the like).
T/F
Business ethics deals with right or wrong behavior within a particular organization.
T
That stems from the basic definition
T/F
An ethical culture is based upon the norms and values of the company.
T
Norms and values help create an organizational culture and are key in supporting or not supporting ethical conduct.
T/F
Business ethics contributes to investor loyalty.
T
Many studies have shown that trust and ethical conduct contribute to investor loyalty.
T/F
The trend is away from cultural or ethically based initiatives to legal initiatives in organizations.
F
Many businesses are communicating their core values to their employees by creating ethics programs and appointing ethics officers to oversee them.
T/F
Investments in business ethics do not support the bottom line.
F
Ethics initiatives create consumer, employee, and shareholder loyalty and positive behavior that contribute to the bottom line.
The Development of Business Ethics in the U.S
1920s: living wage
1930s: The New Deal(FDR): business cause problem
1950s: The Fair Deal (HST): ethical issues cause matter
The Rise of Social Issues in Business
1960s: ethical issues, Decay of inner cities, growth of ecological problems.
Consumer’s Bill of Right(JFK) (• Right to safety. • Right to be informed. • Right to choose.• Right to be heard)
The Great Society(LBJ)(government should provide some degree of economic stability, equality, and social justice.)
Business Ethics as an Emerging Field
1970s: Business ethics: common expression
academic identify ethical issues (or illegal): bribery, deceptive advertising, price collusion, product safety, and ecology
success : ethical decision-making process
1980s: business ethics: publications, courses, conferences, and seminars. Stakeholder theory developed.
Defense Industry Initiative on Business Ethics and
Conduct (DII)
Reagan–Bush Era: Self-regulation rather than regulation by government was in the public’s interest.
Institutionalization of Business Ethics:
1990s: Bill Clinton: support self-regulation and free trade
health-related social issues
Federal Sentencing Guidelines for Organizations (FSGO)
The Twenty-First Century of Business Ethics
George W. Bush: look for new ways to encourage ethical behavior
2002 Congress: Sarbanes–Oxley Act ( ethical and legal risk)
Barack Obama: Inherited the great global financial recession.
Dodd–Frank Wall Street Reform and Consumer Protection Act (financial crisis and recession)
Donald Trump: Decreased environmental and financial regulations Questioned sustainability.
chapter 2
notes from PPT
Relationships and Business
Relationships are associated with both organizational success and misconduct.
why business exists?
because the organizational relationships exist between employees, customers, shareholders, and the community
shareholder framework: Internal and external shareholders agree, collaborate, and engage in confrontations on ethical issues. (• Allows organizations to identify, monitor, and respond to the needs and expectations of stakeholder groups.)
Stakeholders Define Ethical Issues in Business:
• Approaches to stakeholder theory:
1. Normative: Identifies ethical guidelines that dictate
how firms should treat stakeholders.
2. Descriptive: Focuses on the firm’s behavior;
addresses how decisions are made for stakeholder relationships.
3. Instrumental: Describes what happens if firms
behave in a particular way
• Primary stakeholders
• Those whose continued association and
resources are absolutely necessary for a firm’s
survival (customers, shareholders, employees,
suppliers).
• Secondary stakeholders
• Those who are not typically engaged directly in
transactions with a company and are therefore not
essential to its survival (government agencies and
communities).
• Other stakeholders
• Others who have a “stake” or claim in some
aspect of a company’s products, operations,
markets, industry, and outcomes are known as
stakeholders.
Stakeholder Interaction Model:
• Reciprocal relationships between the firm and a
host of stakeholders.
• Recognizes other stakeholders; explicitly
acknowledges dialogue exists between a firm’s
internal and external environments
Stakeholder Orientation:
• Activities to address stakeholder demands:
1. Organization-wide generation of data about
stakeholder groups and assessment of the firm’s
effects on these groups;
2. Distribution of this information throughout the firm;
and
3. Responsiveness of the organization as a whole to
this information.
• Can be viewed as a continuum.
• Firms likely to adopt the concept to varying
degrees.
• To gauge a firm’s stakeholder orientation:
• Evaluate the extent the firm adopts behaviors that
typify the generation.
• An organization may generate and disseminate
more intelligence about some stakeholder
communities than others
Social Responsibility and Business Ethics
• Social responsibility: An organization’s obligation
to maximize its positive impact on stakeholders
and minimize its negative impact.
• Four levels of social responsibility:
1. Economic
2. Legal
3. Ethical
4. Philanthropic
Corporate Citizenship:
meet the economic, legal, ethical, and philanthropic responsibilities placed on them by various stakeholders.
• Four interrelated dimensions:
1. Strong sustained economic performance.
2. Rigorous compliance.
3. Ethical actions beyond what the law requires.
4. Voluntary contributions that advance the reputation and stakeholder commitment of the organization.
• Reputation is one of an organization’s greatest intangible assets with tangible value.
Corporate Governance Provides Formalized Responsibility to Stakeholders
• The stakeholder model places the board of
directors in the position of balancing the interests
and conflicts of a company’s various
constituencies.
• External control of the corporation resides not
only with government regulators but also with key
stakeholders which exert pressure for
responsible conduct.
• Social responsibility activities have a positive
impact on consumer identification.
Views of Corporate Governance:
• Classic agency problem: Ownership (investors)
and control (managers) are separate.
• Managers act as agents for investors, whose
primary goal is increasing the value of the stock.
• Investors and managers are distinct parties with
unique insights, goals, and values.
• Corporate governance mechanisms are needed
to align investor and management interests.
Board of Director Responsibilities:
• Greater demands for accountability and
transparency. Ensure the corporations are run in
an ethical manner.
• Duty of loyalty. All decisions should be in the best
interests of the corporation.
• Knowledge about the investments, business
ventures, and stock market information of a
company creates issues that could violate their
duty of loyalty.
• Executive compensation. Avoid the opportunity to
vote for others’ compensation in return for their
own increased compensation.
• Organizational ethics. Receive training to
increase competency in ethics program
development.
• Audit committee. Address issues such as whistleblower claims, cyber security, and bribery.
• Accountability. Oversight for system of checks
and balances that limit employees’ and managers’ opportunities to deviate from policies and strategies aimed at preventing unethical and illegal activities.
Demand for Accountability and Transparency:
• Directors chosen for expertise, competence, and
ability to bring diverse perspectives.
• Outside directors do not have vested interest.
• Interlocking directorate: Board members linked
to more than one company.
• Legal unless it involves a direct competitor
Executive Compensation:
• Compensation paid to top executives of the
company.
• Ratio of the salaries of the highest-paid executives to the median employee wage should be less.
• Stakeholders support high level of compensation
only when it is linked to strong company performance.
Implementing a Stakeholder Perspective (6 steps):
Step 1: Assessing the Corporate Culture
• Identify the organizational mission, values,
norms, and behavior likely to have implications
for social responsibility.
Step 2: Identifying Stakeholder Groups
• Recognize stakeholder needs, wants, and
desires.
Step 3: Identifying Stakeholder Issues
Step 4: Assessing Organizational Commitment to
Stakeholders and Social Responsibility
• Used to evaluate current practices and to select
concrete social responsibility initiatives.
• Social responsibility disclosures in company
annual reports are directly related to the quality
of corporate governance.
Step 5: Identifying Resources and Determining
Urgency
• Two main criteria: Level of financial and
organizational investments required by different
actions and urgency when prioritizing social
responsibility challenges.
• When the challenge under consideration is
viewed as significant and stakeholder pressures
on the issue can be expected, the challenge is
considered urgent.
Step 6: Gaining Stakeholder Feedback
• General assessment of a firm and its practices
can be obtained through satisfaction or reputation surveys.
• To gauge stakeholders’ perceptions of a firm’s
contributions to specific issues, stakeholder generated media such as blogs, websites, podcasts, and newsletters can be assessed.
• Formal research may be conducted using focus
groups, observation, and surveys.
chapter 2
Flashcard
stakeholders
Definition:
Customers, shareholders, employees, suppliers, government agencies, communities, and many others who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes
Primary stakeholders
Definition:
Those whose continued association and resources are absolutely necessary for a firm’s survival
Secondary stakeholders
Definition:
Do not typically engage directly in transactions with a company and are therefore not essential to its survival
stakeholder interaction model
Definition:
This approach recognizes other stakeholders and explicitly acknowledges that dialogue exists between a firm’s internal and external environments
stakeholder orientation
Definition:
The degree to which a firm understands and addresses stakeholder demands
corporate citizenship
Definition:
The extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by various stakeholders
Reputation
Definition:
A corporation’s image and an intangible asset with tangible value
Corporate governance
Definition:
The development of formal systems of accountability, oversight, and control
shareholder model of corporate governance
Definition:
Founded in classic economic precepts, including the goal of maximizing wealth for investors and owners
stakeholder model of corporate governance
Definition:
A broader view of the purpose of business that considers stakeholder welfare in tandem with corporate needs and interests
interlocking directorate
Definition:
The concept of board members being linked to more than one company
executive compensation
Definition:
How executives are compensated for their leadership, organizational service, and performance
chapter 2 quiz
Corporate governance is defined as _____.
a. the management style of the firm’s CEO
b. classic economic precepts, including the goal of maximizing wealth
c. formal systems of accountability, oversight, and control
d. the memos sent out by upper management on appropriate conduct
e. the members of the Board of Directors
C
Which of the following is NOT a secondary stakeholder group?
a. television news reporters b. employees c. trade associations d. special interest groups e. magazines
B
In the stakeholder interaction model, _____.
a. there are reciprocal relationships between the firm and its stakeholders b. it recognizes other stakeholders, does not explicitly acknowledge that dialogue must exist, but can exist between the firm's employees and customers c. there are no reciprocal relationships between the firm and its stakeholders d. it recognizes other stakeholders and but does not explicitly acknowledge that dialogue must exist between the firm's internal and external environments e. it recognizes other stakeholders and does not explicitly acknowledge that dialogue must exist between the firm's internal and external environments
A
The concept that refers to how closely workplace decisions align with a firm’s stated strategic direction and its compliance with ethical and legal considerations is defined as _____.
a. control b. a duty of loyalty c. accountability d. a duty of oversight e. oversight
C
Groups that influence and/or are affected by a company and that neither engage in economic exchanges with the firm nor are fundamental to its daily survival are collectively called _____.
a. primary stakeholders b. market constituents c. community organizations d. secondary stakeholders e. significant others
d
The four levels of social responsibility are _____.
a. economic, legal, political, and social b. economic, legal, ethical, and philanthropic c. political, economic, legal, and ethical d. ethical, philanthropic, social, and religious e. economic, legal, philanthropic, and social
B
Which of the following is NOT a primary stakeholder group?
a. the Media b. shareholders c. investors d. employees e. customers
A
_____ are groups or individuals who have a claim in some aspect of a company’s products, operations, markets, industry, and outcomes.
a. Customers b. Stakeholders c. Employees d. Investors e. Gatekeepers
B
The shareholder model of corporate governance _____.
a. considers stakeholder welfare in tandem with corporate needs and interests b. is the same as the stakeholder model c. adopts a broader view of the purpose of business than the stakeholder model d. is a less restrictive than the stakeholder orientation e. is founded on the goal of maximizing wealth for investors and owners
e
Which approach to stakeholder theory focuses on the actual behavior of the firm and usually addresses how decisions and strategies are made for stakeholder relationships.
a. Descriptive approach b. Normative approach c. Strategic decision making approach d. Control approach e. Instrumental approach
A
The two-way relationship between a firm and its stakeholders is conceptualized by the _____.
a. corporate governance model b. stockholder-focus approach c. measures of corporate impacts table d. stakeholder orientation model e. stakeholder interaction model
e
Which of the following statements is correct?
a. Social responsibility is associated with decreased profits. b. The degree to which a firm understands and addresses stakeholder demands can be referred to as a stakeholder orientation. c. Primary stakeholders do not typically engage in transactions with a company. d. Ethical issues are usually easy to detect and simple to fix. e. Secondary stakeholders are essential for a company's survival.
b
Which of the following statements is correct?
a. Social responsibility is associated with decreased profits. b. The degree to which a firm understands and addresses stakeholder demands can be referred to as a stakeholder orientation. c. Primary stakeholders do not typically engage in transactions with a company. d. Ethical issues are usually easy to detect and simple to fix. e. Secondary stakeholders are essential for a company's survival.
d
Directors share a ______, which means all their decisions should be in the best interests of the corporation and its stakeholders.
a. duty of control b. duty of accountability c. duty of loyalty d. duty of conflict e. duty of oversight
C
Fortunately, social responsibility and ethics are completely interchangeable terms.
a. True
b. False
B
Chapter 3
Notes from PPT
Ethical Awareness
• People make ethical decisions when they find an
ethical component in a particular issue or
situation.
• Failure to acknowledge or be aware of ethical
issues is hazardous to an organization.
• Ethical issues involve a group, a problem, or an
opportunity that requires introspection and
investigation before a decision can be made.
Foundational Values for Identifying Ethical Issues
• Integrity: Element of virtue, an unimpaired
condition. Integrity relates to product quality,
open communication, transparency, and
relationships.
• Honesty: Truthfulness or trustworthiness. To tell
the truth to the best of your knowledge without
hiding anything.
• Confucius defined an honest person as junzi, or
one who has the virtue ren.
• Honesty
• Ren: One who has humanity.
• Yi: What one should do according to the
relationships with others.
• Li: Good manners or respect.
• Zhi: Whether a person knows what to say and
what to do as it relates to honesty
• Honesty
• The Confucian version of Kant’s Golden Rule is to
treat your inferiors as you would want your superiors
to treat you.
• Virtues such as familial honor and reputation for
honesty are paramount.
• Lying: (1) Untruthful statements that result in damage
or harm; (2) “white lies,” which do not cause damage
but instead function as excuses or a means of
benefitting others; and (3) statements obviously meant
to engage or entertain without malice.
Foundational Values Continued
• Fairness: Just, equitable, and impartial.
• Three fundamental elements that motivate
people to be fair:
1. Equality: The distribution of benefits and
resources.
2. Reciprocity: An interchange of giving and
receiving in social relationships.
3. Optimization: Trade-off between equity (equality)
and efficiency (maximum productivity).
Ethical Issues in Business
• Misuse of Company Time and Resources
• Abusive or Intimidating Behavior: Actions
such as physical threats, false accusations, and
yelling. Meaning differs from person to person.
• Bullying: Creates hostile environment. Workplace
bullying is strongly associated with sleep
disturbances, as well as depression, fatigue,
increased sick days, and stomach problems.
• Lying
1. Joking without malice.
2. Commission lying: Creating a perception or belief
by words that intentionally deceive the receiver of
the message.
3. Omission lying: Intentionally not informing others
of any differences, problems, safety warnings, or
negative issues relating to the product or
company that significantly affect awareness,
intention, or behavior.
• Conflicts of Interest: Individual chooses either
to advance his or her own interests, those of the
organization, or those of some other group.
• Bribery: Offering something (often money) in
order to gain an illicit advantage from someone in
authority.
• Active bribery: The person who promises or
gives the bribe commits the offense.
• Bribery
• Passive bribery: Offense committed by an official
who receives the bribe.
• Not an offense if the advantage was permitted or
required by the written law or regulation of the
foreign public official’s country, including case law.
• Small facilitation payments: Payments made to
obtain or retain business or other improper
advantages—do not constitute bribery payments
for U.S. companies in some situations.
• Often made to induce public officials to perform
their functions.
• Illegal in the United Kingdom
• Corporate Intelligence: Collection and analysis
of information on markets, technologies,
customers, and competitors, as well as on
socioeconomic and external political trends.
• Three types:
• Passive monitoring system for early warning.
• Tactical field support.
• Support dedicated to top-management strategy.
• Discrimination: On the basis of race, color,
religion, sex, marital status, sexual orientation,
public assistance status, disability, age, national
origin, or veteran status is illegal in the United
States.
• Discrimination on the basis of political opinions or
affiliation with a union is defined as harassment.
• Equal Employment Opportunity Commission
• Age Discrimination in Employment Act: Illegal to
discriminate against people 40 years of age or older,
as well as those that require employees to retire
before the age of 70.
• Affirmative Action Programs: Involve efforts to
recruit, hire, train, and promote qualified individuals
from groups that have traditionally been discriminated
against on the basis of race, gender, or other
characteristics.
• Affirmative Action Programs and Supreme
Court Standards
1. There must be a strong reason for developing an
affirmative action program.
2. Affirmative Action Programs must apply only to
qualified candidates.
3. Affirmative Action Programs must be limited and
temporary and therefore cannot include “rigid and
inflexible quotas.”
• Sexual Harassment: Any repeated, unwanted
behavior of a sexual nature perpetrated upon
one individual by another.
• May be verbal, visual, written, or physical.
• Can occur between people of different genders or
those of the same gender.
• The law is primarily concerned with the impact of
the behavior and not its intent (Title VII of the Civil
Rights Act of 1964).
• Hostile work environment—three criteria must
be met. The conduct was:
1. Unwelcome.
2. Severe, pervasive, and regarded by the claimant
as so hostile or offensive as to alter his or her
conditions of employment.
3. Such that a reasonable person would find it hostile
or offensive.
• Hostile work environment
• Employee need not prove the harassment
seriously affected his or her psychological wellbeing or that it caused an injury.
• Decisive issue is whether the conduct interfered
with the claimant’s work performance.
• Dual relationship: A personal, loving, and/or
sexual relationship with someone with whom you
share professional responsibilities.
• If the sexual advances in any form are considered
mutual, then consent is created.
• Unless the employee or employer gets something
in writing before the romantic action begins,
consent can always be questioned.
Ways to Avoid Sexual Misconduct
1. Establish a statement of policy naming someone in the company as ultimately responsible for preventing
harassment at the company.
2. Establish a definition of sexual harassment that includes unwelcome advances, requests for sexual favors, and any other verbal, visual, or physical conduct of a sexual nature; that provides examples of each; and reminds employees the list of examples is not all-inclusive.
3. Establish a non-retaliation policy that protects
complainants and witnesses.
4. Establish specific procedures for prevention of such
practices at early stages. If in writing, they are expected
by law to train employees in accordance with them,
measure their effects, and ensure the policies are
enforced.
5. Establish, enforce, and encourage victims of sexual
harassment to report the behavior to authorized
individuals.
6. Establish a reporting procedure.
7. Make sure the firm has timely reporting requirements to the proper authorities.
• Fraud: Any purposeful communication that
deceives, manipulates, or conceals facts in order
to harm others. Can be a crime; convictions may
result in fines, imprisonment, or both.
• Accounting fraud: Usually involves a
corporations’ financial reports.
• Fraud triangle: Pressure, opportunity, and
rationalization.
• Marketing fraud: Dishonestly creating,
distributing, promoting, and pricing products.
• Puffery: Exaggerated advertising, blustering, and
boasting upon which no reasonable buyer would
rely upon and is not actionable under the Lanham
Act.
• Implied falsity: The message has a tendency to
mislead, confuse, or deceive the public.
• Literally true but imply a false message.
• Literally false
• Tests prove (establishment claims): Advertisement
cites a study or test that establishes the claim.
• Bald assertions (nonestablishment claims):
Advertisement makes a claim that cannot be
substantiated.
• Labeling Issues
• Kroger agreed to remove “raised in a humane
environment” from its packages of chicken.
• Consumer Fraud: When consumers attempt to
deceive businesses for their own gain.
• Shoplifting
• Collusion: An employee assists the consumer in
fraud.
• Duplicity: Consumer stages an accident in a store
and then seeks damages against the store for its lack
of attention to safety.
• Guile: A person who is crafty or understands
right/wrong behavior but uses tricks to obtain an unfair
advantage.
• Insider Trading: An insider is any officer, director, or
owner of 10 percent or more of a class of a
company’s securities.
• Illegal insider trading: The buying or selling of stocks by insiders who possess information that is not yet public.
• Legal insider trading: Legally buying and selling
stock in an insider’s own company, but not all the time.
Insiders are required to report their insider transactions within two business days of the date the transaction occurred.
• Intellectual Property Rights: Legal protection of
intellectual property—music, books, and movies.
• Copyright Act of 1976
• Digital Millennium Copyright Act of 1998
• Digital Theft Deterrence and Copyright Damages
Improvement Act of 1999
chapter 3 flashcard
Integrity
Definition:
Implies a balanced organization that not only makes ethical financial decisions but also is ethical in the more subjective aspects of its corporate culture
Honesty
Definition:
Refers to truthfulness or trustworthiness
Fairness
Definition:
The quality of being just, equitable, and impartial
equality
Definition:
Is about the distribution of benefits and resources
Reciprocity
Definition:
An interchange of giving and receiving in social relationships
Optimization
Definition:
The trade-off between equity (equality) and efficiency (maximum productivity)
ethical issue
Definition:
A problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical
ethical dilemma
Definition:
Is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that have negative outcomes
Abusive or intimidating behavior
Definition:
A common ethical problem for employees that may refer to physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, ignoring someone, and unreasonableness
lying
Definition:
Untruthfulness that can be joking without malice, commission lying, and omission lying
conflict of interest
Definition:
When an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group
Bribery
Definition:
Is the practice of offering something (often money) in order to gain an illicit advantage from someone in authority
active bribery
Definition:
The person who promises or gives the bribe commits the offense
Passive bribery
Definition:
Offense committed by the official who receives the bribe
facilitation payments
Definition:
Payments made to obtain or retain business or other improper advantages that do not constitute bribery payments for U.S. companies in some situations
corporate intelligence
Definition:
The collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends
Hacking
Definition:
Breaking into a computer network to steal information
System hacking
Definition:
Assumes the attacker already has access to a low-level, privileged-user account
Remote hacking
Definition:
Involves attempting to remotely penetrate a system across the Internet
Physical hacking
Definition:
Requires the hacker to enter a facility physically and find a vacant unsecured workstation with an employee’s login and password
Social engineering
Definition:
Tricking individuals into revealing their passwords or other valuable corporate information
Shoulder surfing
Definition:
Someone simply looks over an employee’s shoulder while he or she types a password
Password guessing
Definition:
When an employee is able to guess a person’s password after finding out personal information about him or her
Dumpster diving
Definition:
Digging through trash to find trade secrets
Whacking
Definition:
Using wireless hacking to break into a network
Phone eavesdropping
Definition:
Using a digital recording device to monitor and record a fax line
Discrimination
Definition:
Prejudices based on race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status and illegal in the United States
Equal Employment Opportunity Commission
Definition:
federal agency that protects against workplace discrimination
Age Discrimination in Employment Act
Definition:
Outlaws hiring practices that discriminate against people of 40 years or older, as well as those that require employees to retire before the age of 70
affirmative action programs
Definition:
Involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics
Sexual harassment
Definition:
Any repeated, unwanted behavior of a sexual nature perpetrated upon one individual by another
hostile work environment
Definition:
Three criteria must be met: the conduct was unwelcome; the conduct was severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment; and the conduct was such that a reasonable person would find it hostile or offensive
dual relationship
Definition:
A personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities
fraud
Definition:
Any purposeful communication that deceives, manipulates, or conceals facts in order to harm others
Accounting fraud
Definition:
Inaccurate information in a corporation’s financial reports, in which companies provide important information on which investors and others base decisions involving millions of dollars
Marketing fraud
Definition:
The process of dishonestly creating, distributing, promoting, and pricing products
Puffery
Definition:
Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely on
Implied falsity
Definition:
The message has a tendency to mislead, confuse, or deceive the public
literally false
Definition:
When an advertising says that tests prove (establishment claims), when the advertisement cites a study or test that establishes the claim; and bald assertions (nonestablishment claims), when the advertisement makes a claim that cannot be substantiated
Labeling issues
Definition:
Packaging, advertising, and direct sales communication that mislead consumers
Consumer fraud
Definition:
When consumers attempt to deceive businesses for their own gain
insider trading
Definition:
The buying or selling of stocks by insiders who possess information that is not yet public
Intellectual property rights
Definition:
The legal protection of intellectual property such as music, books, and movies
privacy issues
Definition:
Threats to consumer privacy, especially within the health care and Internet industries
chapter 3 quiz
The three fundamental elements that motivate people to be fair are _____.
a. equality, reciprocity, and optimization. b. honesty, integrity, and morality. c. equality, reciprocity, and harmony. d. truthfulness, fidelity, and harmony. e. charity, fidelity, and harmony.
A
The practice of offering something in order to gain an illicit advantage is _____.
a. omission lying b. intimidating behavior c. bribery d. a conflict of interest e. collusion
c. bribery
Abusive or intimidating behavior _____.
a. relates only to profanity b. does not relate to ignoring someone c. is a problem but is clearly defined by the legal system d. can differ from person to person e. does not need "intent" as a consideration
d. can differ from person to person
Which of the following involve efforts to recruit, hire, train, and promote qualified individuals from groups that have been discriminated against into employment positions?
a. dual relationships b. facilitation payments c. optimizations d. affirmative action programs e. employment quotas
d. affirmative action programs
Creating a perception or belief by words that intentionally deceives someone is _____.
a. related to lying by omission b. related to lying by commission c. related to what is defined as a "white" lie d. related to context and intent e. related to "noise"
b. related to lying by commission
A(n) _____ exists when an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group.
a. ethical dilemma b. facilitation payment c. discrimination situation d. conflict of interest e. corporate intelligence
d. conflict of interest
Discrimination on the basis of all but which of the following is defined as harassment?
a. marital status b. age c. years of experience d. gender e. national origin
c. years of experience
_____ is exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely.
a. Lying b. Fraud c. Dishonesty d. Puffery e. Implied Falsity
d. Puffery
Which of the following is NOT one of the top types of observed misconduct?
a. Internet use abuse b. working more hours than reported c. lying to employees d. putting one's own interests ahead of the organization's e. abusive behavior
b. working more hours than reported
A problem, situation, or opportunity requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong is called a(n) _____.
a. indictment b. conflict of interest c. fraud d. crisis e. ethical issue
e. ethical issue
A payment made to obtain or retain business and is not considered a bribe within the United States is defined as _____.
a. active bribery b. facilitation c. illegal under the Foreign Corrupt Practices Act d. passive bribery e. illegal under the Dodd-Frank Act
b. facilitation
All of the following generate discussion about the ethical nature of a decision EXCEPT _____.
a. the mass media b. individuals in the business c. special interest groups d. blogs and podcasts e. government agency
e. government agency
_______ is one of the most important and oft-cited elements of virtue, and refers to being whole, sound, and in an unimpaired condition.
a. Fairness b. Reciprocity c. Integrity d. Honesty e. Values
c. Integrity
In a dilemma all of the alternatives have negative consequences, so the less harmful choice is made.
a. True
b. False
a. True
Active bribery is an offense committed by the official who receives the bribe.
a. True
b. False
b. False
chapter 4 The Institutionalization of Business Ethics
notes from PPT
Elements of an Ethical Culture
Culture < (Value, Norms, Artifacts, Behavior) < (Voluntary Actions, Governance, Core Practices, Legal compliance)
Managing Ethical Risk through Mandated and Voluntary Programs
• Voluntary practices: Include beliefs, values, and
voluntary contractual obligations of a business.
• All businesses engage in some level of
commitment to voluntary activities to benefit both
internal and external stakeholders.
• Strategic philanthropy: Giving back to
communities and causes.
• Voluntary boundary: A management-initiated
boundary of conduct (beliefs, values, voluntary
policies, and voluntary contractual obligations).
• Core practice: Helps ensure compliance with
legal requirements, industry self-regulation, and
societal expectations.
• Mandated boundary: An externally imposed
boundary of conduct (laws, rules, regulations,
and other requirements).
Mandated Requirements for Legal Compliance
• Laws and regulations established by governments to
set minimum standards for responsible behavior—
society’s codification of what is right and wrong.
• Civil law: Defines the rights and duties of individuals
and organizations (including businesses).
• Criminal law: Prohibits specific actions (fraud, theft,
or securities trading violations) and imposes fines or
imprisonment as punishment for breaking the law.
Laws Regulating Competition
Sherman Antitrust Act, 1890:
Prohibits monopolies
Clayton Act, 1914:
Prohibits price discrimination, exclusive dealing, and other efforts to restrict competition
Federal Trade Commission Act, 1914:
Created the Federal Trade Commission (FTC) to help enforce antitrust laws
Robinson–Patman Act, 1936:
Bans price discrimination between retailers and wholesalers
Wheeler–Lea Act, 1938:
Prohibits unfair and deceptive acts regardless of whether competition is injured
Lanham Act, 1946:
Protects and regulates brand names, brand marks, trade names, and trademarks
Celler–Kefauver Act, 1950:
Prohibits one corporation from controlling another where the effect is to lessen competition
Consumer Goods Pricing Act, 1975:
Prohibits price maintenance agreements among manufacturers and resellers in interstate commerce
FTC Improvement Act, 1975:
Gives the FTC more power to prohibit unfair industry practices
Antitrust Improvements Act, 1976:
Strengthens earlier antitrust laws; gives Justice Department more investigative authority
Foreign Corrupt Practices Act, 1977:
Makes it illegal to pay foreign government officials to facilitate business or to use third parties such as agents and consultants to provide bribes to such officials
Trademark Counterfeiting Act, 1980:
Provides penalties for individuals dealing in counterfeit goods
Trademark Law Revision Act, 1988:
Amends the Lanham Act to allow brands not yet introduced to be protected through patent and trademark registration
Federal Trademark Dilution Act, 1995:
Gives trademark owners the right to protect trademarks and requires them to relinquish those that match or parallel existing trademarks
Digital Millennium Copyright Act, 1998:
Refines copyright laws to protect digital versions of copyrighted materials, including music and movies
Controlling the Assault of NonSolicited Pornography and Marketing Act (CAN-SPAM), 2003:
Bans fraudulent or deceptive unsolicited commercial email and requires senders to provide information on how recipients can opt out of receiving additional messages
Fraud Enforcement and Recovery Act, 2009:
Strengthens provisions to improve the criminal enforcement of fraud laws, including mortgage fraud, securities fraud, financial institutions’ fraud, commodities fraud, and fraud related to the federal assistance and relief program
Dodd–Frank Wall Street Reform and Consumer Protection Act, 2010:
Overhaul of the U.S. financial regulatory system
Laws Protecting Consumers
Federal Hazardous Substances Labeling Act, 1960:
Controls the labeling of hazardous substances for household use
Truth in Lending Act, 1968:
Requires full disclosure of credit terms to purchasers
Consumer Product Safety Act, 1972:
Created the Consumer Product Safety Commission to establish safety standards and regulations for consumer products
Fair Credit Billing Act, 1974: Requires accurate, up-to-date consumer credit records
Consumer Goods Pricing Act, 1975:
Prohibits price maintenance agreements
Consumer Leasing Act, 1976:
Requires accurate disclosure of leasing terms to consumers
Fair Debt Collection Practices Act, 1978:
Defines permissible debt collection practices
Toy Safety Act, 1984:
Gives the government the power to recall dangerous toys quickly
Nutritional Labeling and Education Act, 1990:
Prohibits exaggerated health claims and requires all processed foods to have labels showing nutritional information
Telephone Consumer Protection Act, 1991:
Establishes procedures for avoiding unwanted telephone solicitations
Children’s Online Privacy Protection Act, 1998:
Requires the FTC to formulate rules for collecting online information from children under age 13
Do Not Call Implementation Act, 2003:
Directs the FCC and the FTC to coordinate so that their rules are consistent regarding telemarketing call practices including the Do Not Call Registry and other lists, as well as call abandonment
Credit Card Accountability Responsibility and
Disclosure Act, 2009:
Implemented strict rules on credit card companies regarding topics such as issuing credit to youth, terms disclosure, interest rates, and fees
Dodd–Frank Wall Street Reform and Consumer Protection Act, 2010:
Promotes financial reform to increase accountability and transparency in the financial industry, protects consumers from deceptive financial practices, and establishes the Bureau of Consumer Financial Protection
Reverse Mortgage Stabilization Act, 2013:
Established more requirements to improve the fiscal safety and soundness of the reverse mortgage program to consumers
Supervisory Privilege Parity Act, 2014:
Amended the Consumer Financial Protection Act of 2010 to specify that privilege and confidentiality are maintained when information is shared by certain nondepository covered persons with federal and state financial regulators, and for other purposes
E-Warranty Act, 2015:
Allows manufacturers to meet warranty and labeling requirements for consumer products by displaying the terms of warranties on websites, and for other purposes
Federal Cybersecurity Enhancement Act, 2015:
To improve federal network security and authorize and enhance an existing intrusion detection and prevention system for civilian federal networks
Consumer Review Fairness Act, 2016:
Prohibits the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered in interstate commerce that were the subject of the contract, and
for other purposes
Laws Promoting Equity and Safety
Equal Pay Act of 1963 (amended)：
Prohibits sex-based discrimination in the rate of pay to men and women doing the same or similar jobs
Title VII of the Civil Rights Act of 1964
(amended in 1972):
Prohibits discrimination in employment on the basis of race, color, sex, religion, or national origin
Occupational Safety and Health Act, 1970:
Designed to ensure healthful and safe working conditions for all employees
Title IX of Education Amendments of 1972:
Prohibits discrimination based on sex in education programs or activities that receive federal financial assistance
Pension Reform Act, 1974:
Designed to prevent abuses in employee retirement, profitsharing, thrift, and savings plans
Equal Credit Opportunity Act, 1974:
Prohibits discrimination in credit on the basis of sex or marital status
Age Discrimination Act, 1975:
Prohibits discrimination on the basis of age in federally assisted programs
Pregnancy Discrimination Act, 1978:
Prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions
Immigration Reform and Control Act, 1986:
Prohibits employers from knowingly hiring a person who is an unauthorized alien
Americans with Disabilities Act, 1990:
Prohibits discrimination against people with disabilities and requires that they be given the same opportunities as people without disabilities
Civil Rights Act, 1991:
Provides monetary damages in cases of intentional employment discrimination
Don’t Ask, Don’t Tell Repeal Act, 2011:
Act banned discrimination on the basis of sexual orientation in the military
The Sarbanes–Oxley (SOX) Act
• Oversight of corporate accounting practices.
• Makes fraudulent financial reporting a crime.
• Strengthens fraud penalties.
• Requires corporations to establish codes of
ethics for financial reporting.
• Must demonstrate greater transparency in
financial reporting to investors and other
stakeholders.
• Public Company Accounting Oversight Board
• Monitors/establishes standards and rules for auditors.
• Has investigatory and disciplinary power over auditors and securities analysts.
• Attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm’s audit committee.
• Limits the length of time lead auditors can serve a
particular client.
- Auditor and Analyst Independence
- Section 201 prohibits registered public accounting firms from providing both non-audit and audit services to a public company.
- All material off-balance-sheet transactions and other relationships with unconsolidated entities that affect current or future financial conditions of a public company must be disclosed in each annual and quarterly financial report.
- Public companies must report “on a rapid and current basis” material changes in their financial condition or operations.
• Whistle-Blower Protection
• Granted special damages and attorneys’ fees.
• Cost of Compliance
• Section 404 requires companies to document
both the results of financial transactions and the
processes they used to generate them.
• Compliance costs were high shortly after
Sarbanes–Oxley was passed; they have declined
over the years
Dodd–Frank Wall Street Reform and Consumer Protection Act
• Charged with improving the quality of financial data
available to government officials and creating a
better system of analysis for the financial industry.
• The Financial Stability Oversight Council
(FSOC)
• Responsible for maintaining the stability of the
financial system in the U.S. through monitoring the
market, identifying threats, promoting market
discipline among the public, and responding to
major risks that threaten stability.
• The Financial Stability Oversight Council
(FSOC)
• Has the authority to limit or closely supervise
financial risks, create stricter standards for
banking and nonbanking financial institutions, and
disband financial institutions that present a
serious risk to market stability
• Consumer Financial Protection Bureau
(CFPB)
• Independent agency within the Federal Reserve
System that “regulate(s) the offering and provision
of consumer financial products or services under
the Federal consumer financial laws.”
• Power over credit markets as well as authority to
monitor lenders and ensure they are in
compliance with the law
• Consumer Financial Protection Bureau (CFPB)
• Curtail unfair lending and credit card practices, enforce
consumer financial laws, and check the safety of
financial products before their launch into the market.
• Whistle-Blower Bounty Program
• Whistle-blowers are eligible to receive 10 to 30
percent of fines and settlements if their reports result
in convictions of more than $1 million in penalties.
Laws That Encourage Ethical Conduct
1991 Law: U.S. Sentencing Guidelines for Organizations created for federal prosecutions of
organizations. These guidelines provide for just punishment, adequate deterrence, and
incentives for organizations to prevent, detect, and report misconduct. Organizations need to
have an effective ethics and compliance program to receive incentives in the case of
misconduct.
2004 Amendments: The definition of an effective ethics program now includes the development of an
ethical organizational culture. Executives and board members must assume the responsibility of
identifying areas of risk, providing ethics training, creating reporting mechanisms, and
designating an individual to oversee ethics programs.
2007-2008 Additional definition of a compliance and ethics program: Firms should focus on due diligence to
detect and prevent misconduct and promote an organizational culture that encourages ethical
conduct. More details are provided, encouraging the assessment of risk and outlining appropriate steps in designing, implementing, and modifying ethics programs and training that will include all
employees, top management, and the board or governing authority. These modifications
continue to reinforce the importance of an ethical culture in preventing misconduct.
2010 Amendments for reporting to the board: Chief compliance officers are directed to make their
reports to their firm’s board rather than to the general counsel. Companies are encouraged to create hotlines, perform self-audit programs, and adopt controls to detect misconduct internally. More specific language has been added to the word prompt in regard to what it means to promptly report misconduct. The amendment also extends operational responsibility to all personnel within a company’s ethics and compliance program.
2014 The commission investigated how the sentencing guidelines could be used by regulatory and
law enforcement agencies to recommend effective ethics and compliance programs. The
commission assessed its efforts to encourage corporations, nonprofits, government agencies,
and other organizations to form institutional cultures that discourage misconduct.
2015 The commission continued to emphasize the importance of the organizational culture and that
there should be standards and procedures in place to prevent and detect misconduct. In
addition, when there is misconduct, community service may be ordered if it is designed to
remedy the misconduct.
Federal Sentencing Guidelines for Organizations (FSGO)
• Seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008–2009 financial crisis.
• Contains 16 provisions that include increasing the
accountability and transparency of financial institutions,
creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives.
• FSGO Steps
- A firm must develop and disseminate a code of conduct that communicates required standards and identifies key risk areas for the organization.
- High-ranking personnel in the organization who are known to abide by the legal and ethical standards of the industry (ethics officer, vice president of human resources, general counsel, etc.) must have oversight over the program.
- No one with a known propensity to engage in misconduct should be put in a position of authority.
- A communications system for disseminating standards and procedures (ethics training) must also be put into place
- Organizational communications should include a way for employees to report misconduct without fearing retaliation, such as an anonymous toll-free hotline or an ombudsman. Monitoring and auditing systems designed to detect misconduct are also required.
- If misconduct is detected, the firm must take appropriate and fair disciplinary action. Individuals both directly and indirectly responsible for the offense should be disciplined. In addition, the sanctions should be appropriate for the offense.
- After misconduct has been discovered, the organization must take steps to prevent similar offenses in the future. This usually involves making modifications to the ethical compliance program, conducting additional employee training, and issuing communications about specific types of conduct.
Core or Best Practices: Voluntary Responsibilities
1. Improve quality of life and make communities the
places where people want to do business, raise
families, and enjoy life. Makes it easier to attract and
retain employees and customers.
2. Reduce government involvement by providing
assistance to stakeholders.
3. Develop employee leadership skills.
4. Create an ethical culture and values that act as a
buffer to organizational misconduct.
Core or Best Practices: CauseRelated Marketing
• Ties an organizations product(s) directly to a
social concern through a marketing program.
• Affects buying patterns.
• Often of short duration, so consumers may not
adequately associate the business with a
particular cause.
Core or Best Practices: Strategic Philanthropy
• Synergistic and mutually beneficial use of an
organization’s core competencies and resources
to deal with key stakeholders so as to bring
about organizational and societal benefits.
• Argues that philanthropy must have a long-term
positive impact.
• Should pertain to the mission and operations of
the company. Must also have strong support from
top managers.
Core or Best Practices: Social Entrepreneurship
• When an entrepreneur founds an organization with
the purpose of creating social value.
• Can be for-profit, nonprofit, government-based, or
hybrids.
• Many social entrepreneurs choose to organize
their enterprises as nonprofits.
• The major difference between a social enterprise
and a nonprofit is the use of entrepreneurial
principles and business-led strategies to create
social change
• Companies engaged in strategic philanthropy will
often outsource their philanthropic programs
and/or partner with other organizations.
• Directly implement their programs and are
organized around achieving social objectives.
Importance of Institutionalization in Business Ethics
• Institutionalization helps implant values, norms,
and artifacts in organizations, industries, and
society.
• Failure to understand core practices provides the
opportunity for unethical conduct.
• Institutionalization of business ethics has advanced rapidly in recent years as stakeholders recognized the need to improve business ethics.
chapter 4
Flashcard
Voluntary practices
Definition:
Include the beliefs, values, and voluntary contractual obligations of a business
philanthropy
Definition:
Giving back to communities and causes
Core practices
Definition:
Are documented best practices, often encouraged by legal and regulatory forces as well as industry trade associations
Better Business Bureau
Definition:
A leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases
Mandated boundaries
Definition:
Externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements
Civil law
Definition:
Defines the rights and duties of individuals and organizations (including businesses)
Criminal law
Definition:
Not only prohibits specific actions—such as fraud, theft, or securities trading violations—but also imposes fines or imprisonment as punishment for breaking the law
procompetitive legislation
Definition:
Laws have been passed to prevent the establishment of monopolies, inequitable pricing practices, and other practices that reduce or restrict competition among businesses
consumer protection law
Definition:
Laws that protect consumers require businesses to provide accurate information about their goods and services and follow safety standards
FTC’s Bureau of Consumer Protection
Definition:
protects consumers against unfair, deceptive, or fraudulent practices
Food and Drug Administration (FDA)
Definition:
federal agency of the United States Department of Health and Human Services that has stringent standards for approving drugs
Occupational Safety and Health Administration
Definition:
Enforces safe and healthy working conditions and makes regular surprise inspections to ensure businesses maintain safe working environments
Public Company Accounting Oversight Board
Definition:
Monitors accounting firms auditing public corporations and establishes standards and rules for auditors in accounting firms
Consumer Financial Protection Bureau
Definition:
An independent agency within the Federal Reserve System that “regulate[s] the offering and provision of consumer financial products or services under the federal consumer financial laws
Cause-related marketing
Definition:
Ties an organization’s product(s) directly to a social concern through a marketing program
Strategic philanthropy
Definition:
The synergistic and mutually beneficial use of an organization’s core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits
Social entrepreneurship
Definition:
When an entrepreneur founds an organization with the purpose of creating social value
Chapter 4 quiz
The Act/Agency that makes regular surprise inspections to ensure businesses maintain safe working environments is called the _____.
a. The Occupational Safety and Health Administration
b. Equal Safety Act
c. ICE Agency
d. Civil Rights for Employees Act
e. Immigration Reform and Control Office
a. The Occupational Safety and Health Administration
The Sarbanes–Oxley Act was passed to provide oversight of _____.
a. federal sentencing guidelines' compliance requirements b. nonprofit organizations' governance practices c. price discrimination practices d. corporate accounting practices e. corporate environmental practices
d. corporate accounting practices
Which of the following is true of the Sherman Antitrust Act?
a. It prohibits organizations from holding monopolies in their industries. b. It prohibits the use of price maintenance agreements among manufacturers and in interstate commerce. c. It has refined copyright laws to protect digital versions of copy-righted materials, including music and movies. d. It inhibits fair competition. e. It prohibits unfair and deceptive acts and practices, regardless of whether competition is impaired.
a. It prohibits organizations from holding monopolies in their industries.
_____ impose(s) fines or imprisonment as punishment for breaking the law.
a. Criminal law b. International guidelines c. The honor system d. Voluntary compliance
a. Criminal law
he Sarbanes–Oxley Act (SOX) _____.
a. is the same as the Public Company Accounting Oversight Board b. does not provide protection for "whistle-blowing" employees c. did not modify the attorney–client relationship in that it does not require lawyers to report wrongdoing to top managers and/or the board of directors d. attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee e. does not impose additional requirements on executive
d. attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm’s audit committee
________________ ties an organization’s products directly to a social concern through a marketing program.
a. Social marketing b. Cause-related marketing c. Business ethics d. Strategic marketing e. Strategic philanthropy
b. Cause-related marketing
The Dodd–Frank Wall Street Reform Act _____.
a. created only one financial agency (The Financial Consumer Protection Agency) b. seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008–2009 financial crisis c. created only one financial agency (The Financial Stability Oversight Council). d. contains five provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives e. contains 10 provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives
b. seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008–2009 financial crisis
Which of the following is derived from precedents established by judges?
a. Administrative Law b. Statutory Law c. Constitutional Law d. Civil Law e. Common Law
e. Common Law
Which dimension of social responsibility refers to business’s contributions to society?
a. economic b. legal c. international d. voluntary responsibilities e. ethical
d. voluntary responsibilities
Accountants, lawyers, financial rating agencies, financial reporting services and risk assessors of financial products are all examples of _____, who must trust and be trusted by stakeholders to make business work.
a. financial gurus b. secondary stakeholders c. gatekeepers d. experts e. lawmakers
c. gatekeepers
The Consumer Financial Protection Bureau (CFPB) _____.
a. has no authority to monitor lenders b. has no responsibility to curtail unfair lending and credit card practices c. has supervisory power over credit markets as well as the authority to monitor lenders d. has no responsibility to check the safety of financial products before their launch into the market e. has no supervisory power over credit markets
c. has supervisory power over credit markets as well as the authority to monitor lenders
What does the Federal Sentencing Guidelines for Organizations (FSGO) focus on?
a. background checks on employees and other agents b. improving the quality of life for employees and communities c. schemes by top management to hide losses and other performance problems d. penalties for companies convicted of restraint of trade charges e. encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs
e. encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs
Which of the following is an office, created by the Dodd–Frank Wall Street Reform and Consumer Protection Act, which is charged with creating a better system for analyzing the financial industry?
a. The Office of Whistle-Blower Protection b. The Consumer Financial Protection Bureau c. The Financial Stability Oversight Council d. The Public Accounting Oversight Board e. The Office of Financial Research
e. The Office of Financial Research
Congress passed the FSGO in 1991 to create an incentive for organizations to develop and implement programs designed to foster ethical and legal compliance. These guidelines, developed by the U.S. Sentencing Commission, apply to all felonies and class A misdemeanors committed by employees in association with their work.
a. True
b. False
a. True
The focus of core practices is on developing an individual’s morals, rather than on structurally sound organizational practices and integrity for financial and nonfinancial performance measures.
a. True
b. False
b. False
The mutually beneficial use of the company’s core competencies to deal with key stakeholders so as to bring about organizational and societal benefits is referred to as cause-related marketing.
False
When a company decides to donate technology or other provisions to schools, this is assocated with ________________ actions.
a. ethical b. minimum c. voluntary d. legal e. economic
voluntary
Laws and regulations change over time; however, in the United States the thrust of most business legislation can be summed up as
a.
any practice is permitted that does not substantially reduce competition and harm consumers or society.
b. any practice is permitted. c. any practice is permitted that does not substantially harm consumers or society, but this applies only within the United States. d. any practice is permitted that does not harm the environment. e. any practice is permitted that does not break the law.
any practice is permitted that does not substantially reduce competition and harm consumers or society.
law and regulation
The _____ was called “a sweeping overhaul of the financial regulatory system…on a scale not seen since the reforms that followed the Great Depression.”
a.
Dodd-Frank Wall Street Reform and Consumer Protection Act
b. Age Discrimination in Employment Act c. Title VII of the Civil Rights Act d. Americans with Disabilities Act e. Equal Pay Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
In studying business ehtics, how does unlawful behavior ususally begin?
a.
When the organization lacks an code of ethics
b. When businesspeople blatantly engage in misconduct c. When organizational stakeholders are not prioritized d. When businesspeople stretch the limits of ethical standards e. When organizations engage in activities that are clearly illegal
d.
When businesspeople stretch the limits of ethical standards
Many consumers losts their homes during the great recession or financial crisis of 2007. As a response to that time, _______________________ was passed into law.
a. Environmental Protection Agency b. World Bank c. Consumer Financial Protection Bureau d. World Trade Organization e. Sarbanes-Oxley Act
c.
Consumer Financial Protection Bureau
Choose the answer that best reflects incentives for a company to create core practices to ensure ethical and legal compliance?
a.
Department of Justice, Dodd-Frank Act, and Sarbanes-Oxley Act
b. Food and Drug Administration, Federal Sentencing Guidelines for Organizations, and Sarbanes-Oxley Act c. Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act d. Department of Justice, Sarbanes-Oxley Act, and Open Compliance Ethics Group e. Securities and Exchange Commission and Sarbanes-Oxley Act
c.
Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act
The broadest financial overhaul of the regulatory system since the Great Despression（1930） is known as the Sarbanes-Oxley Act.
True
False
F
Companies operate within systems of core practices and both volunary and mandated boundaries. In terms of boundaries that are mandated, they are established and enforced by ______________
a. voluntary actions. b. values and principles c. core principles. d. the legal system. e. norms and artifacts.
d.
the legal system.
The _____ of ethics involves embedding values, norms, and artifacts in organizations, industries, and society.
a.
institutionalization
b. mobilization c. enforcement d. commercialization e. rationalization
institutionalization
Chapter 6
notes from PPT
• Moral philosophy: Specific principles or values
people use to decide what is right and wrong.
Guidelines for “determining how conflicts in
human interests are to be settled and for
optimizing mutual benefit of people living
together in groups.”
• Economic value orientation: Associated with
values quantified by monetary means. If an act
produces more economic value for its effort, then
it should be accepted as ethical.
• Idealism: Efforts required to account for all
objects in nature and experience and to assign
them a higher order of existence.
• Realism: An external world exists independent of
our perceptions. It assumes humankind is not
naturally benevolent and kind, but instead
inherently self-centered and competitive.
• Relativist perspective: Evaluates ethicalness
subjectively on the basis of individual and group
experiences.
• Descriptive relativism: Relates to observations
of other cultures. Different cultures exhibit
different norms, customs, and values, but these
observations say nothing about the higher
questions of ethical justification.
• Meta-ethical relativism: People naturally see
situations from their own perspectives, meaning
there is no objective way of resolving ethical
disputes between different value systems and
individuals.
• Normative relativism: Assumes one person’s
opinion is as good as another’s.
Moral Philosophies and Terms
• Monists: Believe only one thing is intrinsically
good.
• Hedonism: The idea that pleasure is the ultimate
good, or the best moral end involves the greatest
balance of pleasure over pain. Hedonism defines
right or acceptable behavior as that which
maximizes personal pleasure.
• Quantitative hedonists: More pleasure is better.
• Qualitative hedonists: It is possible to get too
much of a good thing (such as pleasure).
• Pluralists: Believe two or more things are
intrinsically good.
• Plato: The good life is a mixture of moderation
and fitness, proportion and beauty, intelligence
and wisdom, sciences and arts, and pure
pleasures of the soul.
• Instrumentalists: Reject the ends/means argument
and argue ends, purposes, or outcomes are
intrinsically good in and of themselves (John Dewey:
Almost any action can be an end or a mean).
• Goodness theories: Focus on the end result of
actions and the goodness or happiness created by
them.
• Obligation theories: Emphasize the means and
motives by which actions are justified (Teleology and
Deontology).
Obligation Theories: Teleology
• Teleology: Acts are morally right or acceptable if
they produce some desired result, such as
realization of self-interest or utility.
• Egoism: Defines right or acceptable actions as
those that maximize a particular person’s selfinterest as defined by the individual.
• Enlightened egoism: Take a long-range
perspective and allow for the well-being of others
although their own self-interest remains
paramount.
• Teleology
• Utilitarianism: Defines right or acceptable actions as
those that maximize total utility, or the greatest good
for the greatest number of people.
• Rule utilitarianism: Determines behavior on the basis of principles or rules designed to promote the greatest utility, rather than on individual examinations of each situation they encounter.
• Act utilitarianism: Examine specific actions, rather
than the general rules governing them, to assess
whether they will result in the greatest utility.
Obligation Theories: Deontology
• Deontology: Focuses on the preservation of
individual rights and on the intentions associated with
a particular behavior rather than on its consequences.
• Regard certain behaviors as inherently right as
defined by self or extraterrestrial.
• Nonconsequentialism: A system of ethics based on
respect for persons. (Another reference for
deontology.)
• Categorical imperative: “Act as if the maxim of thy
action were to become by thy will a universal law of
nature.”
• Rule deontologists: Believe conformity to general
moral principles based on logic determines
ethicalness.
• Act deontologists: Actions are the proper basis to
judge morality or ethicalness and requires a person
use equity, fairness, and impartiality when making
and enforcing decisions.
Virtue Ethics
• Virtue ethics: What is moral in a given situation is
not only what conventional morality requires but what
a person with a “good” moral character deems
appropriate.
• Virtue ethics approach to business:
1. Good corporate ethics programs encourage individual
virtue and integrity.
2. By the employee’s role in the community
(organization), these virtues form a good person.
3. An individual’s ultimate purpose is to serve society’s
demands and the public good and be rewarded in his
or her career.
4. The well-being of the community goes hand in hand
with individual excellence.
Justice Theories
• Justice: Fair treatment and due reward in
accordance with ethical or legal standards,
including the disposition to deal with perceived
injustices of others.
• Based on the perceived rights of individuals and
on the intentions of the people involved in a
business interaction.
• Evaluates ethicalness on the basis of fairness.
Types of Justice
Justice Type
Distributive justice: Based on the evaluation of outcomes or results of the business relationship
Areas of Emphasis
Benefits derived Equity in rewards
Justice Type
Procedural justice: Based on the processes and activities that produce the outcome or results
Areas of Emphasis
Decision making process Level of access, openness, and participation
Justice Type
Interactional justice: Based on relationships and the treatment of others
Areas of Emphasis
Accuracy of information Truthfulness, respect, and courtesy in the process
Cognitive Moral Development and Limitations
• Stage 1: Punishment and obedience: Right
and wrong are not connected with any higher
order or philosophy but rather with a person who
has power.
• Stage 2: Individual instrumental purpose and
exchange: Right is what serves his or her own
needs. Individuals evaluate behavior on the basis
of its fairness to them.
• Stage 3: Mutual interpersonal expectations,
relationships, and conformity: Emphasize the
interests of others rather than simply those of
themselves, although ethical motivation is still derived
from obedience to rules.
• Stage 4: Social system and conscience
maintenance: Determine what is right by considering
their duty to society, not just to certain other people.
Duty, respect for authority, and the maintenance of
the social order become the focal points at this stage
• Stage 5: Prior rights, social contract, or utility:
Individuals are concerned with upholding the basic
rights, values, and legal contracts of society.
Individuals feel a sense of obligation or commitment
to other groups and recognize that in some cases
legal and moral points of view may conflict.
• Stage 6: Universal ethical principles: Right is
determined by universal ethical principles everyone
should follow. People have certain inalienable rights
that are universal in nature and consequence. These
rights, laws, or social agreements are valid not
because of a particular society’s laws or customs, but
because they rest on the premise of universality
White-Collar Crime (WCC)
• Does more damage in monetary and emotional
loss in one year than violent crimes do over
several years combined.
• Tend to be highly educated, in positions of power,
trust, respectability, and responsibility.
• The corporate culture can transcend the
individuals beliefs.
• With time, patterns become institutionalized
sometimes encouraging unethical behaviors.
• The views and behaviors of an individual’s
acquaintances within an organization can affect
crime.
• For companies with a high number of ethical or
unethical employees, people who are undecided
about their behavior (about 40 percent of
businesspeople) are more likely go along with
their coworkers.
• Some businesspeople may have inherently
criminal personalities. Corporate psychopaths, or
managers who are nonviolent, selfish, and
remorseless, exist in many large corporations.
Common Justifications for White-Collar Crime
1. Denial of responsibility. (Everyone can, with varying degrees of plausibility, point the finger at
someone else.)
2. Denial of injury. (White-collar criminals often never meet or interact with those who are
harmed by their actions.)
3. Denial of the victim. (The offender is playing tit-for-tat and claims to be responding to a prior
offense inflicted by the supposed victim.)
4. Condemnation of the condemners. (Executives dispute the legitimacy of the laws under which
they are charged, or impugn the motives of the prosecutors who enforce them.)
5. Appeal to a higher authority. (“l did it for my family” remains a popular excuse.)
6. Everyone else is doing it. (Because of the highly competitive marketplace, certain pressures
exist to perform that may drive people to break the law.)
7. Entitlement. (Criminals simply deny the authority of the laws they have broken.)
chapter 6
flashcard
Moral philosophy
Definition:
Refers to the specific principles or values people use to decide what is right and wrong
economic value orientation
Definition:
Associated with values quantified by monetary means; according to this theory, if an act produces more economic value for its effort, then it should be accepted as ethical
Idealism
Definition:
A moral philosophy that places special value on ideas and ideals as products of the mind
Realism
Definition:
The view that an external world exists independent of our perceptions
Monists
Definition:
Believe only one thing is intrinsically good
hedonism
Definition:
The idea that pleasure is the ultimate good, or the best moral end involves the greatest balance of pleasure over pain
quantitative hedonists
Definition:
Those who believe more pleasure is better
qualitative hedonists
Definition:
Those who believe it is possible to get too much of a good thing
Pluralists
Definition:
Often referred to as nonhedonists, take the opposite position that no one thing is intrinsically good
instrumentalists
Definition:
Reject the ideas that (1) ends can be separated from the means that produce them and (2) ends, purposes, or outcomes are intrinsically good in and of themselves
Goodness theories
Definition:
Focus on the end result of actions and the goodness or happiness created by them
Obligation theories
Definition:
Emphasize the means and motives by which actions are justified, and are divided into the categories of teleology and deontology
Teleology
Definition:
Refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result, such as pleasure, knowledge, career growth, the realization of self-interest, utility, wealth, or even fame
consequentialism
Definition:
Teleological philosophies that assess the moral worth of a behavior by looking at its consequences
Egoism
Definition:
Defines right or acceptable behavior in terms of its consequences for the individual
enlightened egoism
Definition:
A long-range perspective and allows for the well-being of others although their own self-interest remains paramount
utilitarianism
Definition:
Seeks the greatest good for the greatest number of people
rule utilitarians
Definition:
Argue that general rules should be followed to decide which action is best
act utilitarians
Definition:
The rightness of each individual action must be evaluated to determine whether it produces the greatest utility for the greatest number of people
Deontology
Definition:
Refers to moral philosophies that focus on the rights of individuals and the intentions associated with a particular behavior rather than its consequences
nonconsequentialism
Definition:
Regard for certain behaviors as inherently right, and the determination of this rightness focuses on the individual actor, not on society
categorical imperative
Definition:
If you feel comfortable allowing everyone in the world to see you commit an act and if your rationale for acting in a particular manner is suitable to become a universal principle guiding behavior, then committing that act is ethical
Rule deontologists
Definition:
Conformity to general moral principles based on logic determines ethicalness
Act deontologists
Definition:
Hold that actions are the proper basis to judge morality or ethicalness
relativist perspective
Definition:
Definitions of ethical behavior are derived subjectively from the experiences of individuals and groups
Descriptive relativism
Definition:
Relates to observations of other cultures
Meta-ethical relativism
Definition:
Proposes that people naturally see situations from their own perspectives, and there is no objective way of resolving ethical disputes between different value systems and individuals
normative relativism
Definition:
The assumption that one person’s opinion is as good as another’s
Virtue ethics
Definition:
Argues that ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person with a “good” moral character would deem appropriate in a given situation
Justice
Definition:
Fair treatment and due reward in accordance with ethical or legal standards, including the disposition to deal with perceived injustices of others
Distributive justice
Definition:
Based on the evaluation of the outcomes or results of a business relationship
Procedural justice
Definition:
Considers the processes and activities that produce a particular outcome
Interactional justice
Definition:
Based on the relationships between organizational members, including the way employees and management treat one another
Kohlberg’s model of cognitive moral development (CMD)
Definition:
Theory in which people make different decisions in similar ethical situations because they are in different moral development stages
white-collar crime (WCC)
Definition:
Crimes perpetrated every year by nonviolent business criminals
quiz from chapter 6 This philosophy evaluates ethicalness subjectively on the basis of individual and group experiences \_\_\_\_\_\_\_. a. teleology b. relativism c. utilitarianism d. deontology e. egoism
b. relativism
_______ is right or acceptable behavior in terms of the consequences for the individual.
a. Utilitarianism b. Relativism c. Egoism d. Rule deontology e. Act deontology
c. Egoism
This philosophy assumes what is moral in a given situation is not only what conventional morality requires but also what the mature person with a “good” moral character deems appropriate _______.
a. virtue ethics b. relativism c. justice d. utilitarianism e. deontology
a. virtue ethic
What type of justice exists if employees are being open, honest, and truthful in their communications at work?
a. hedonistic b. procedural c. distributive d. interactional e. civil
d. interactional
This philosophy focuses on the preservation of individual rights and on the intentions associated with a particular behavior rather than on its consequences _______.
a. egoism b. utilitarianism c. teleology d. deontology e. relativism
d. deontology
This philosophy defines right or acceptable actions as those that maximize total utility, or the greatest good for the greatest number of people _______.
a. utilitarianism b. deontology c. relativism d. teleology e. egoism
a. utilitarianism
John, vice president of operations at We Care, Inc., approves the illegal disposal of toxic waste at his firm’s international factory. John has committed _______.
a. fraud b. stakeholder disenfranchisement c. employee abuse d. hedonism e. a white-collar crime
e. a white-collar crime
_____________ is the final stage of cognitive moral development, according to Lawrence Kohlberg.
a. The stage of universal ethical principles b. The stage of punishment and obedience c. The stage of social system and conscience maintenance d. The stage of individual instrumental purpose and exchange e. The stage of prior rights, social contract, or utility
a. The stage of universal ethical principles
This famous statement, “Act as if the maxim of the action were to become by will a universal law of nature,” is called _______.
a. Kant's Categorical Imperative b. Marxism c. Friedman's Categorical Imperative d. Leninism e. Mao's Categorical Imperative
a. Kant’s Categorical Imperative
Teleology is a philosophy that states that _______.
a. moral rightness or acceptability is defined in terms of consequences for the individual b. it is not possible to get too much of a good thing c. people decide what is legal or illegal d. a relativist perspective will lead to career growth e. an act is morally right or acceptable if it produces a desired result
e. an act is morally right or acceptable if it produces a desired result
The types of moral philosophy discussed in the text include _______.
a. teleology, utility, relativist perspective, virtue ethics, and deontology b. teleology, deontology, relativist perspective, virtue ethics, and justice c. teleology, self-interest, relativist perspective, virtue ethics, and justice d. teleology, utility, relativist perspective, virtue ethics, and justice e. teleology, self-interest, relativist perspective, virtue ethics, and career growth
b. teleology, deontology, relativist perspective, virtue ethics, and justice
According to Kohlberg’s model of cognitive moral development, different individuals make different decisions in similar ethical situations because _______.
a. no one wants to be the same as others b. they have different personalities c. they are influenced by different family values d. they are in different stages of cognitive moral development e. they are of different ages
d. they are in different stages of cognitive moral development
Which of the following is a correct statement?
a. Distributive justice is based on the processes and activities that produce the best outcome or results. b. According to the relativist perspective, definitions of ethical behavior are derived objectively. c. Interactional justice is based on the evaluation of outcomes or results of the business relationship. d. Procedural justice is based on an evaluation of the communication process used in the business relationship. e. A moral virtue represents an acquired disposition that is valued as a part of an individual's character.
e. A moral virtue represents an acquired disposition that is valued as a part of an individual’s character.
A moral philosophy is a general set of values by which different people live.
a. True
b. False
b. False
The concept of a moral philosophy is inexact. For that reason, moral philosophies must be assessed on a continuum rather than as static entities.
a. True
b. False
a. True
This philosophy defines good or respectable behavior as those that maximize a particular person’s self-interest as defined by the individual.
a.
Teleology
b. Utilitarianism c. Egoism d. Deontology e. Relativism
c.
Egoism
The components of _____ important to business agreements have been characterized as truthfulness, fairness, empathy, and self control.
a. virtue b. egoism c. moral philosophy d. utilitarianism e. deontology
a.
virtue
An office manager who orders that a solar panel manufacturing plant be refitted to make it safer for workers, no matter the expense may be a(n) _____ because he believes in the rights of all people.
a.
utilitarian
b. hedonist c. egoist d. deontologist e. relativist
d.
deontologist
The Golden Rule and Kant’s categorical imperative are associated with which moral philosophy?
a.
Egoism
b. Utilitarianism c. Teleology d. The relativist perspective e. Deontology
e.
Deontology
The phrase moral philosophy refers to
a.
values developed in an organizational environment.
b. the legality of business activities. c. the principles or rules that policymakers use to create legislation. d. the morality of business activities. e. the rules or assumptions that people use to decide what is right and wrong.
e.
the rules or assumptions that people use to decide what is right and wrong.
QUESTION 6
The idealism philosophy is a subset of the economic value orientation that views ethics as whether an act produces more financial gain for its effort.
True
False
False
The an example of enlightened egoism
a.
centers on one’s short-term self-interest.
b. centers completely on the short-term well-being of others. c. is when an someone focuses on spiritual feelings above all others. d. centers on the long-term well-being of others. e. focuses on an individual's self-interest but takes others’ well-being into account.
e.
focuses on an individual’s self-interest but takes others’ well-being into account.
不知关注他人，还会关注自己的利益
The famous statement “Act as if the maxim of thy action were to become by thy will a universal law of nature” is called
a.
rule of deontologists.
b. categorical imperative. c. utilitarianism. d. economic imperative. e. philosophy of action.
b.
categorical imperative
The ideas of moral philosophies is imprecise.
True
False
True
the moral instructions of the world’s great religions are often general and imprecise.
A primary problem with relativism is
a.
that few people believe that these principles are important.
b. that it is very complicated. c. that it highlights people’s differences, not similarities. d. that it represents unattainable goals. e. that many feel that it only works in theory.
c.
that it highlights people’s differences, not similarities.
chapter 6 quiz
QUESTION 1
_____ think that not just one thing is intrinsically good.
a.
Deontologists
SL b.
Pluralists
c. Hedonists d. Teleologists e. Relativists
1 points
QUESTION 2
In Kohlberg’s stages of cognitive moral development, what is the last stage?
a.
Individual instrumental purpose and exchange
b. Need achievement c. Social system and conscience maintenance
SL d.
Universal ethical principles
e. Punishment and obedience
1 points
QUESTION 3
_____ are considered to have lower ethical issue awareness, suggesting they could have difficulty identifying ethical issues. They may be more dedicated to completing projects as well as focused on their group’s goals and values.
a. Hedonists
SL b.
Relativists
c. Teleologists d. Pragmatists e. Deontologists
1 points
QUESTION 4
All of the following examples are considered white collar crime except for ____________
a.
Corporate tax evasion
SL b.
Mugging someone
c. Identity theft d. Insider trading e. Credit card fraud
1 points
QUESTION 5
_____ addresses the issue of what people think they can expect based on their rights and performance in the workplace, and therefore is more likely to be based on deontological moral philosophies than on teleological or utilitarian ones.
a.
Relativism
SL b.
Justice
c. Egoism d. Rights e. Virtue ethics
1 points
QUESTION 6
As time passes, an action or behavior may come to be seen as unethical according to this philosophy.
SL a.
The relativist perspective 人们会改变他们思想，viewpoint is from person to person
b. Deontology c. Rule deontology d. Egoism e. Teleology
1 points
QUESTION 7
In Kohlberg’s model, the stage of mutual interpersonal expectations, relationships, and conformity (stage 3) differs from the stage of individual instrumental purpose and exchange (stage 2) in terms of the individual’s motives in
a.
maintaining obedience to authority.
b. upholding the basic values of society. c. maintaining the social order. d. considering duty to society.
SL e.
considering fairness to others.
1 points
QUESTION 8
Kohlberg’s stages of development includes the stage classifying an individual who describes right and wrong based on legal contracts. This is called ______________
a.
Punishment and obedience (stage )
b. Universal ethical principles (stage 6)
SL c.
Prior rights, social contract, or utility (stage 5)
d. Mutual interpersonal expectations, relationships, and conformity (stage 3) e. Social system and conscience maintenance (stage 4)
1 points
QUESTION 9
As a person lives more life and moves through various life stages, Kohlberg’s model of development suggests __________________
SL a.
may change his/her cognitive moral development and behavior.
b. will experience less opportunity to behave unethically. c. is unlikely to change his/her values and ethical behavior. d. will likely be promoted. e. will depend more on the input of significant others in ethical decision making.
1 points
QUESTION 10
Interactional justice addresses the actions that result in a particular outcome.
True
SL False
未选择题库
With Kohlberg’s CMD (cognitive moral development) model, the six stages can be categorized into three levels of ethical concerns. When an indidual is at the 2nd level ______________
a. see beyond the norms, laws, and authority of groups or individuals.
SL b. define right as that which conforms to the expectations of good behavior of the larger society.
c. are concerned with their long-term interests and with internal rewards and punishments.
d. are unethical.
e. are concerned with their immediate interests and with external rewards and punishments.
\_\_\_\_\_ says behavior defined as ethical includes not only acting within accepted moral standards but also taking into account what an individual with sound moral characteristics might do in a situation. a. Reciprocity b. Rule deontology SL c. Virtue ethics d. Hedonism e. Act utilitarianism
Kohlberg’s theory of CMD (cognitive moaral development) is considered by some to be problematic because ________________
SL a. The original theory was transferred from children to adults.
b. All of the moral philosophies are regarded as equal to one another.
c. It can only apply to those with a deontological perspective.
d. The theory has little reliability or validity.
e. It assumes that very few adults ever reach stage 6.
notes from chapter 5 Ethical Decision Making
A Framework for Ethical Decision
Making in Business
• Ethical awareness: The ability to perceive whether a situation or decision has an ethical dimension.
• Ethical issue intensity: The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization.
• Personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and
the personal pressures prevailing at a particular place and time.
• Moral intensity: Individuals’ perceptions of social pressure and the harm they believe their decisions will have on others.
Framework for Understanding Ethical Decision Making in Business
Ethical issue intensity + individual factors + organizational factors + opportunity = business ethical evolution and intentions —-> ethical or unethical behavior
individual factors
• Gender: In many aspects there are no differences between
men and women with regard to ethical decision making.
• Education: Those more familiarized with the ethical
decision making process due to education or experience
are likely to spend more time examining and selecting
different alternatives to an ethics issue.
• Nationality: Impossible to state that ethical decision
making in an organizational context will differ significantly
among individuals of different nationalities.
• Age: Older employees with more experience have greater
knowledge to deal with complex industry-specific ethical
issues. Younger managers are far more influenced by
organizational culture.
• Locus of control: How people view themselves in relation
to power.
• External control: Going with the flow. Life events are due to
uncontrollable forces.
• Internal control: They control the events in their lives by
their own effort and skill.
Organizational Factors
• Conditions in an organization that limit or permit
ethical or unethical behavior.
• Results from conditions that either provide
rewards, whether internal or external, or fail to
erect barriers against unethical behavior.
• Internal rewards: Feelings of goodness and
personal worth generated by performing altruistic or
ethical acts.
• External rewards: What an individual expects to
receive from others in the social environment in terms
of overt social approval, status, and esteem.
• Individual immediate job context: Where an
individual works, whom they work with, and the
nature of the work.
Business Ethics Intentions,
Behavior, and Evaluations
• Ethical business issues and dilemmas involve
problem-solving situations where the rules
governing decisions are often vague or in
conflict.
• Not always immediately clear whether the
decision was ethical.
• No magic formulas that ethical business issues
or dilemmas can be plugged into to get a
solution
• Even if they mean well, most businesspeople
make ethical mistakes.
• No substitute for critical thinking and the ability to
take responsibility for our own decisions.
• Guilt or uneasiness is the first sign an unethical
decision may have occurred.
• Change the behavior to reduce such feelings.
• This change can reflect a person’s values or
morals shifting to fit the decision or the person
changing his or her decision type the next time a
similar situation occurs.
• The road to success depends on how the
businessperson defines success.
Using the Ethical Decision Making
Model to Improve Ethical Decisions
• Ethical decision making model does not help in
determining if a business decision is right or wrong.
• Provides insights about ethical decision making in
businesses.
• Business ethics involves value judgments and
collective agreement about acceptable patterns of
behavior.
• Gaining an understanding of the factors that make up
ethical decisions helps in differentiating between an
ethical issue and a dilemma
Normative Considerations in
Ethical Decision Making
• How organizational decision makers should
approach an issue.
• Different from a descriptive approach that
examines how organizational decision makers
approach ethical decision making.
• A normative approach in business ethics
revolves around the standards of behavior within
the firm as well as within the industry.
• Normative rules and standards are based on individual
moral values as well as the collective values of the
organization.
• The normative approach for business ethics is
concerned with general ethical values implemented into
business.
• Concepts like fairness and justice are highly important in
a normative structure.
• Strong normative structures in organizations are
positively related to ethical decision making.
Institutions as the Foundation for
Normative Values
• Government, religion, and education influence
creation of values, norms, and conventions.
• Industry competition determined by:
1. Barriers to entry into the industry.
2. Available substitutes for the products produced by the
industry rivals.
3. The power of the industry rivals over their customers.
4. The power of the industry rivals’ suppliers over other
rivals.
Implementing Principles and Core
Values in Ethical Decision Making
• John Rawls: Believed justice principles were
beliefs that everyone could accept.
• Veil of ignorance by Rawls: Examined how
individuals would formulate principles if they
were uncertain about their future position in
society.
• Principles of justice by Rawls
• Liberty principle (equality principle): Each person
has basic rights that are compatible to the basic
liberties of others.
• Difference principle: Economic and social
equalities (or inequalities) should be arranged to
provide the most benefit to the least-advantaged
members of society.
• Companies convert basic principles into core
values.
• Provide the abstract ideals that are distinct from
individual values and daily operational
procedures.
• Include operating in a sustainable manner,
collaboration and teamwork, and avoiding bribery.
• Provide a blueprint into the firm’s goals and how it
views ethical decision making.
Principles and Values page 21
Understanding Ethical Decision Making
• Top level support for ethical behavior is
instrumental in helping employees engage in
their personal approaches to ethical decision
making.
• Normative perspectives set forth ideal goals to
which organizations should aspire.
• Knowledge about ethical decision making helps
in making good decisions.
Flashcard from chapter 5
Ethical awareness
Definition:
The ability to perceive whether a situation or decision has an ethical dimension
Ethical issue intensity
Definition:
The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization
Moral intensity
Definition:
To individuals’ perceptions of social pressure and the harm they believe their decisions will have on others
gender
Definition:
In ethical decision making, research shows that in many aspects there are no differences between men and women
Education
Definition:
A significant factor in the ethical decision-making process; generally, the more education or work experience people have, the better they are at making ethical decisions
Nationality
Definition:
The legal relationship between a person and the country in which he or she is born
Age
Definition:
An individual factor that has a complex relationship with business ethics
Locus of control
Definition:
To individual differences in relation to a generalized belief about how you are affected by internal versus external events or reinforcements
external control
Definition:
Those who see themselves as going with the flow because that is all they can do
internal control
Definition:
Those believe they control the events in their lives by their own effort and skill, viewing themselves as masters of their destinies and trusting in their capacity to influence their environment
Corporate culture
Definition:
A set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share
ethical culture
Definition:
Reflects the integrity of decisions made and is a function of many factors, including corporate policies, top management’s leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior
significant others
Definition:
Those who have influence in a work group, including peers, managers, coworkers, and subordinates
Obedience to authority
Definition:
A reason employees resolve business ethics issues by simply following the directives of a superior
Opportunity
Definition:
The conditions in an organization that limit or permit ethical or unethical behavior
immediate job context
Definition:
Where they work, whom they work with, and the nature of the work
normative approaches
Definition:
How organizational decision makers should approach an issue
instrumental concern
Definition:
focuses on positive outcomes, including firm profitability and benefits to society
institutional theory
Definition:
theory that organizations operate according to taken-for-granted institutional norms and rules
veil of ignorance
Definition:
a thought experiment that examined how individuals would formulate principles if they did not know what their future position in society would be
equality principle
Definition:
states that each person has basic rights that are compatible to the basic liberties of others
difference principle
Definition:
states that economic and social equalities or inequalities should be arranged to provide the most benefit to the least-advantaged members of society
quiz from chapter 5
Individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements is known as \_\_\_\_\_\_. a. morality beliefs b. internal control c. external control d. moral intensity SL e. locus of control
The ability to perceive whether a situation or decision has an ethical dimension is defined as \_\_\_\_\_\_. a. business issue awareness b. ethical issue intensity c. moral issue intensity SL d. ethical awareness e. moral awareness
Elena, an employee at ABC Marketing, has observed misconduct at work and wonders if she should report it. In the end, she decides not to do so because of the possible repercussions at work. Which of the following has determined the Elena's action? a. corporate culture b. opportunity SL c. organization factors d. individual factors e. control issues
Which statement best describes ethical issue intensity?
a. The perceived value of an ethical issue to the society.
SL b. The perceived relevance or importance of an ethical issue to the individual, work group, and/or organization
c. The perceived importance of an ethical issue to the government.
d. The perceived relevance or importance of an ethical issue to the local community.
e. A set of values, beliefs, goals, norms, and ways to solve problems that members of an organization share.
Which of the following statements best describes an opportunity?
a. organizational factors
SL b. the conditions in an organization that limit or permit ethical or unethical behavior
c. a reflection of whether the firm has an ethical conscience
d. how easy it is to pilfer office supplies from one’s workplace
e. a corporate culture
Those who have influence in a work group, including peers, managers, coworkers, and subordinates, are referred to as significant others. Which of the following is supported by research concerning significant others?
a. Significant others within an organization may have less of an impact on a worker’s decisions than gender.
b. Significant others within an organization have little impact on a worker’s decisions.
c. Significant others within an organization have no impact on a worker’s decisions.
d. Significant others within an organization have more impact on a worker’s decisions on a daily basis than any other factor.
SL e. Significant others within an organization may have more impact on a worker’s decisions on a daily basis than any other factor.
Ethical \_\_\_\_\_\_ is the ability to perceive whether a situation or decision has an ethical dimension. a. personality b. education c. morality d. intensity SL e. awareness
According to researchers, normative values largely originate from all of the following EXCEPT \_\_\_\_\_\_. a. family b. religion c. friends SL d. the media e. government
A corporate culture can be defined as ______.
a. a set of rules that some employees agree to obey
b. the perceived importance of an ethical issue to the government
SL c. a set of values, beliefs, goals, norms, and ways to solve problems that employees of an organization share
d. the working environment in the executive suite
e. the interpersonal relationships in the organization
Which of the following is NOT a factor in the ethical decision-making model? a. organizational factors SL b. employee benefits packages c. opportunity d. ethical issue intensity e. individual factors
Rawls used what he called the veil of ignorance which led him to develop ______.
a. the difference principle which states that each person has basic rights that are compatible to the basic liberties of others
b. five main principles of justice
c. the equality principle in that economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society
SL d. the difference principle in that economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society
e. the Constitution principle
The relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization is known as \_\_\_\_\_\_. a. moral intensity b. locus of control c. obedience to authority d. opportunity SL e. ethical issue intensity
\_\_\_\_\_ involves the conditions for encouraging or limiting ethical behavior in an organization through rewards for ethical behavior or failing to prohibit unethical behavior. a. Punishment b. Regulation c. Locus of Control d. Governance SL e. Opportunity
The opportunities that employees have for unethical behavior in an organization can be nearly eliminated through formal codes, policies, and rules that are adequately enforced by management.
SL a. True
b. False
Applying a personal moral philosophy is the first step in the ethical decision-making process.
a. True
SL b. False
quiz
When ethical instructions are given by a higher up, the choice to follow those instructions is called
a.
moral intensity.
b. gender.
SL c.
obedience to authority.
d. ethical issue intensity. e. an internal locus of control.
Management and business studies related to nationality and the practice of making ethical decisions
a.
suggests that corporations pay a lot of attention to such research.
b. suggests that the influence of nationality on corporate culture is growing. c. suggests that organizations should be very concerned about an employee's nationality. d. shows no relationship between the two.
SL e.
is hard to interpret in a business context because of cultural differences.
An ethical organizational culture requires_____ and _____ to establish an ethics program and monitor the complex ethical decisions being made by employees.
SL a.
shared values; proper oversight
b. ethical issue intensity; ethics training c. individual ethics; ethical issue intensity d. employee evaluations; good intentions e. organizational factors; individual factors
For employees and individuals who start the shift in values that ends with making unethical decisions, there are many common justifications used to reduce feelings of guilt. Chose the option below that would NOT eliminate guilt.
a. Those around me are doing it so why shouldn't I? b. If I don't do this, I might not be able to get a good reference from my boss when I leave. c. If I don't do this, I might never be promoted. d. I need a paycheck and can't afford to quit right now.
SL e.
This is in keeping with my personal morals and the code of conduct, so it is okay.
In the workplace, individuals who think their actions influence their life’s circumstances have a(n)
a.
external locus of control.
SL b.
internal locus of control.
c. moral intensity d. obedience to authority e. opportunity
Within a company itself, the values of the workplace can have a greater degree of importance on a decision than an individual’s own set of morals and values.
SL True
False
As Chapter Five explains, there are many factors that influence an individual’s behavior. Despite intentions to act a certain way and do the right thing, ____________ can affect a person’s intent.
a. the desire for financial gain b. familial expectations c. religious beliefs d. cognitive dissonance
SL e.
organizational or social forces
Much research is conducted on topics related to locus of control. One such study discovered that people displaying characteristics of external control had improved ethical decision making, compared to those with internal control
True
SL False
There may be a greater probability that organizations will cut corners when margins are low. This can happen because of high levels of ___________________.
错的
a.
Cooperation
b. Profit
SL c.
Loss
d. Competition e. Return
When a company’s program of ethics is based on _______________, the program leads to greater successes than others focused strictly on following laws or federal compliance initiatives.
错的
SL a.
principles
b. customer c. values d. political e. social
