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
