Unit 2- Common Ethical Issues Flashcards
Branch of philosophy concerned with the meaning of all aspects of human behavior- right vs. wrong, just vs. unjust
Ethics
Act allowed or in conformity with the law of the land
Legal
Situations not causing many issues
Legal-ethical
Ignoring dangerous work conditions in overseas clothing manufacturers; personal ethics vs. legality
Legal-unethical
US government leaking docs during Vietnam war; Personal ethics vs. legality
Illegal- ethical
Stable, enduring goals a person has for life; most important principles
Values
Sets of rules that people develop based on cultural norms and beliefs passed through generations and cultural groups
Morals
Rules, principles, standards in the context of business activities
Organizational Ethics
Four main levels of ethical issues
Societal, Stakeholder, Internal Policy, Personal
Ethical issues relating to the world as a whole
Societal Issues
Policies that affect organization’s customers, employees, suppliers, people in the community
Stakeholder Issues
Internal relationships between company and employees such as fairness in management, pay, or employee participation
Internal Policy Issues
How people treat others in their organization such as gossip or taking credit for another’s work
Personal Issues
How does a company’s ethical behavior impact organizational outcomes?
Ethical behavior is set and modeled by managers; objectives are specific and measurable
Philosophy in which companies voluntarily engage in actions that benefit society at large- socially, economically, environmentally, or politically
Corporate Social Responsibility (CSR)
Examples of CSR
Reliable product, charging a fair price, paying a fair wage, caring for the environment, acting on social concerns
What does CSR depend on?
Resources, available assets, corporate culture, personal beliefs, priorities of senior management, ownership
All parties who have a stake in performance or output of a company such as unions, employees, investors, suppliers, consumers, government, communities
Stakeholders
Aim of CSR
increase long-term profits, increase shareholder trust through positive public relations and high ethical standards to reduce business and legal risks by taking responsibility for corporate actions
Governs global trade by overseeing implementation of trade agreements between nations
World Trade Organization (WTO)
Purpose of WTO
improve stability and predictability of global trade
Establishes a company’s key values, describes company’s obligation to stakeholders, details how company plans to implement values and vision, guides staff on ethical standards and ways to achieve them
Code of Ethics
Ethical commitments or statements that are contrary to actual practices
Greenwashing
Ability of all individuals in an organization to exist in a system of openness, communication, and accountability; perceived quality of intentionally shared info
Internal Transparency
Act passed in response to several highly-publicized corporate fraud cases; mandates reporting transparency in financial and accounting as well as supply-chain activities
Sarbanes-Oxley Act (SOX)
Those who tell public or authorities about alleged misconduct in government departments, private companies or organizations
Whistleblowers
Companies are motivated to adopt CSR policies because they recognize it can help improve financial well-being
Enlightened Self-Interest
What steps can a business take to encourage internal transparency?
Conduct annual trainings, develop company-wide code of ethics, establish a corporate culture that values ethical behavior and condemns unethical actions, have an ethics hotline for anonymous reporting
