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IB - Essential only > Session 4 > Flashcards

Session 4 Flashcards

more brief

1
Q

What are business ethics?

A

Accepted principles of right or wrong that govern the conduct of
businesspeople

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2
Q

What is an ethical strategy?

A

A strategy, or course of action, that does not violate a company’s
business ethics

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3
Q

What is 7 step decision making process?

A
  1. Identify the decision
  2. Gather information
  3. Identify alternatives
  4. Weigh the evidence
  5. Choose among alternatives
  6. Take action
  7. Review your decision
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4
Q

Why are many ethical issues rooted in?

A

Differences in political systems, laws, economic development, and culture

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5
Q

What do most common ethical issues involve? (5)

A
  1. Employment practices.
  2. Human rights.
  3. Environmental regulations.
  4. Corruption.
  5. Moral obligations of multinational corporations.
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6
Q

How should firm guard against ethical abuse? (3)

A
  • Establish minimal acceptable standards that safeguard the basic rights and dignity of employees.
  • Audit foreign subsidies and contractors regularly to ensure standards are being met.
  • Take corrective action as necessary
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7
Q

What are some basic human rights (not universally accepted)? (5)

A
  • Freedom of association.
  • Freedom of speech.
  • Freedom of assembly.
  • Freedom of movement.
  • Freedom from political repression.
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8
Q

What company adopted Sullivan principles?

A

General Motors

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9
Q

What are first 3 of Sullivan principles (see slide 17 for rest)?

A
  • Company should not obey the apartheid rules in its
    operation in South Africa
  • Company should promote abolition of apartheid laws
  • Was not sufficient to break down the apartheid regime.
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10
Q

What is main ethical issue with env. pollution?

A

Problems occur when environmental regulations differ between host and home nations.

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11
Q

What is tragedy of commons?

A

Occurs when a resource held in common by all but owned by no one is overused by individuals, resulting in its degradation

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12
Q

What is global tragedy of the commons enhanced by?

A

Corporations that move production locations where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global commons.

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13
Q

What is FCPA? (2)

A
  • Regulates conduct of int. business in the taking of bribes and other unethical actions.
  • Amended to allow for “facilitating payments.”
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14
Q

What is Convention on Combating Bribery of Foreign Public Official in International Business Transactions?

A

Makes the bribery of foreign officials a criminal offense

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15
Q

Advantage of bribes? (2)

A

May improve efficiency and help growth.

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16
Q

Why do bribes reduce businesses’ incentive to invest?

A

Reduces the returns on business investment and leads to low economic growth

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17
Q

What is an ethical dilemma?

A

Ethical dilemmas are situations in which no alternatives seem
ethically acceptable

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18
Q

What are the 6 determinants of ethical behavior?

A
  • Personal ethics.
  • Decision-making processes.
  • Organizational culture.
  • Unrealistic performance goals.
  • Leadership.
  • Societal culture.
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19
Q

What are personal ethics? (2)

A
  • Generally accepted principles of right and wrong governing the conduct of individuals
  • guided by our parents, our schools, our religion, and the media
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20
Q

How could personal ethics be challenged? (2)

A
  • Expatriate managers may face pressure to violate
    their personal ethics because they are away from
    their ordinary social context and culture.
  • Parent company may pressure managers to meet
    unrealistic goals that can only be fulfilled by acting
    unethically.
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21
Q

What are Roots of Unethical Behavior? (6)

A
  1. Personal Ethics
  2. Decision-Making Processes
  3. Organizational Culture
  4. Unrealistic Performance Goals
  5. Leadership
  6. Societal Culture
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22
Q

Why is Decision-Making Processes at the root of unethical behavior
(3)?

A
  • Businesspeople may act unethically when they
    fail to ask, “Is this decision or action ethical?”
  • Problems arise in processes that do not
    incorporate ethical considerations into
    business decision making.
  • Need to better understand how individuals make
    decisions that are ethical or unethical in an
    organizational environment.
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23
Q

What is organizational culture?

A
  • Values and norms shared among an organization’s employees
24
Q

Why is organizational culture at the root of unethical behavior?

A
  • Some organizational culture may not encourage people to think through ethical consequences of decisions.
25
Q

Why are Unrealistic Performance Goals at the root of unethical behavior?

A
  • Pressure from parent company to meet unrealistic performance goals by cutting corners or acting unethically.
26
Q

What does leadership do?

A
  • Helps to establish the culture of an organization and set the examples that others follow.
27
Q

Why is leadership at the root of unethical behavior?

A

Employees often take cues from business leaders…

28
Q

Why is societal culture at the root of unethical behavior(2 good +2 bad characteristics)?

A

Cultures that emphasize individualism and uncertainty avoidance are more likely to stress ethical behavior than cultures where masculinity and power distance are emphasized.

29
Q

What is philosophy?

A

A system of beliefs and knowledge provides a global influential
framework

30
Q

What is an approach?

A

A focused way to deal with something, largely influenced by the philosophy.

31
Q

What does a methodology do?

A

Helps Approach dealing with something by providing method

32
Q

What does Straw Men Approach include (INAPROPRIATE GUIDELINES!) ? (4)

A
  1. The Friedman Doctrine
  2. Cultural relativism
  3. The righteous moralist
  4. The naïve immoralist
33
Q

What is Friedman Doctrine?

A
  • Nobel Prize–winning economist Milton Friedman said “the social responsibility of business is to increase profits,” so long as the company stays within the rules of law.
34
Q

What is cultural relativism? (3)

A
  • Ethics are reflection of culture.
  • Rejects the idea that universal notions of morality transcend different cultures.
  • When in Rome, do as the Romans do.
35
Q

What is righteous moralist approach? (3)

A
  • Home-country standards of ethics should be followed in foreign countries.
  • Typically associated with managers from developed nations.
  • Criticized for its proponents going too far
36
Q

What is naïve immoralist approach?

A
  • If a manager of a multinational sees that firms from
    other nations are not following ethical norms in a
    host nation, that manager should not either.
37
Q

What does utilitarian approach to ethics say?

A
  1. The moral worth of actions or practices is determined by their consequences
  2. Actions are desirable if they lead to the best
    possible balance of good consequences over
    bad consequences.
  3. Best decisions are those that produce the
    greatest good for the greatest number of
    people.
38
Q

Drawbacks to utilitarian approach? (2)

A
  • Difficult to measure benefits, costs, and risks of the action.
  • Fails to consider justice.
39
Q

What does Kant’s philosophy say? (3)

A
  • Do you embrace the idea that you should be treated the same way
    you behave and treat others?
  • People should be treated as ends and never purely as means to the
    ends of others.
  • People have dignity and need to be respected.
40
Q

Why are Kantian ethics incomplete?

A
  • System has no place for moral sentiments such as sympathy or
    caring.
41
Q

What are rights theories? (2)

A
  • Human beings have fundamental rights and privileges that transcend national borders and cultures
  • Moral theorists argue that fundamental human rights form the basis for a moral compass that managers should use in ethical decision making.
42
Q

What is Universal Declaration of Human Rights?

A

Lays down principles that should be adhered to irrespective of the culture.

43
Q

What are Justice Theories?

A
  • Focus on the attainment of a just distribution of
    economic goods and services.
  • A just distribution is a distribution of goods
    and services that is considered fair and
    equitable
44
Q

What is veil of ignorance approach? (4)

A

Ask yourself: What system would you design under a veil of
ignorance?

Decision makers should imagine that they do not know what their role would be in that society or organization

Each person is permitted the max amount of basic
liberty compatible with a similar liberty for others. (vote/ f of speech)

Inequality is allowed only if the inequalities benefit
everyone.

45
Q

How to expand while maintaining ethical behavior? (7 aspects)

A
  1. Hiring and promotion
  2. Organizational culture and leadership
  3. Decision-making processes
  4. Ethics officers
  5. Moral courage
  6. Corporate social responsibility (CSR)
  7. Sustainability
46
Q

How stay/become more ethical through Hiring and promotion? (3)

A
  • Hire and promote people with a strong sense of
    personal ethics.
  • Businesses can give potential employees
    psychological tests and check with prior employers
    regarding ethical behavior.
  • Prospective employees should investigate the ethical
    climate in an organization prior to taking a position.
47
Q

How stay/become more ethical through your Organizational culture and leadership? (3)

A
  • Articulate values that place a strong emphasis on
    ethical behavior.
  • Emphasize the importance of a code of ethics.
  • Implement a system of incentives and rewards that
    recognize people who engage in ethical behavior and
    sanction those who do not
48
Q

How stay/become more ethical through the Decision-making processes? (4)

A
  • Put decision-making processes in place that require
    people to consider the ethical dimension of business
    decisions.
  • Does the decision fall within the accepted values of
    standards that typically apply in the organizational
    environment?
  • Is there a willingness to see the decision
    communicated to all stakeholders affected by it?
  • Would people close to me (family members, friends,
    colleagues) approve of the decision?
49
Q

Five-step process to think through ethical problems?

A
  1. Identify which stakeholder decision would affect (moral imagination)
  2. Determine if decision would violate stakeholder’s fundamental rights
  3. Establish moral intent—place moral concerns ahead of other concerns
  4. Engage in ethical behavior
  5. Audit decisions to make sure they are consistent with ethical principles
50
Q

What is moral imagination?

A

Standing in the shoes of the stakeholder and asking
how a proposed decision might impact that
stakeholder

51
Q

Why institute ethical officers? To: …(8)

A
  1. Assess the needs and risks that an ethics program must address.
    2 Develop and distribute a code of ethics.
    3 Conduct training programs for employees.
    4 Establish and maintain confidentiality of employees.
    5 Comply with government laws and regulations.
    6 Monitor and audit ethical conduct.
    7 Take action, where appropriate.
    8 Periodically reviewing and updating the code of ethics.
52
Q

Why can moral courage help reducing chances of ethical issues? (3)

A
  1. Enables managers to walk away from a decision that
    is profitable but unethical.
  2. Gives an employee the strength to say no to a
    superior who instructs employee to pursue actions
    that are unethical.
  3. Gives employees the integrity to go public to the
    media and blow the whistle on persistent unethical
    behavior in a company.
53
Q

Why can corporate social responsibility help reducing chances of ethical issues? (3 bullet points)

A
  • With power comes the social responsibility to
    give something back to the societies that enable
    multinationals to grow and prosper.
  • Advocates argue that businesses need to
    recognize their noblesse oblige.
  • Power can be used in a positive way to increase
    social welfare, which is ethical, or used in a manner
    that is ethically and morally suspect.
54
Q

What do sustainable strategies do?

A

They help the firm make good profits without harming the environment while acting in a socially responsible manner to stakeholders

55
Q

Core idea of sustainability?

A

Organization’s actions do not exert a negative impact on the ability of future generations to meet their own economic needs and actions impart long-run economic and social benefits on stakeholders

56
Q

What does sustainable strategy require? (2)

A
  1. To use precautionary principles when assessing a course of action
  2. Do not precipitate or participate in a situation that results in a tragedy of commons

IB - Essential only (4 decks)

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