week 7 Flashcards
explain institutionalisation in business ethics
Institutionalization in business ethics relates to established laws, customs, and expected organizational programs that are considered normative in establishing reputation.
Institutions provide requirements, structure, and societal expectations to reward and sanction ethical decision making.
Three dimensions of institutionalisation
Volountary practices
core practices
mandated boundries
explain 3 dimensions of institutionalisation in detail
Voluntary practices: Beliefs, values, and voluntary contractual obligations of a business
Philanthropy: Giving back to communities and causes
Core practices: Documented best practices, often encouraged by legal and regulatory forces and trade associations
The Better Business Bureau can provide direction
Mandated boundaries: Externally imposed boundaries of conduct (e.g. laws, rules, regulations and other requirements
2 types of law
cival and criminal
explain cival law
defines the rights and duties of individuals and organizations
Individuals (in court) enforce civil laws
- tort as private law
- punishment as compensation
- injured person as platif
- proof: preponderance of evidence
explain criminal law
defines the rights and duties of individuals and organizations
Individuals (in court) enforce civil laws
Criminal law prohibits specific actions and imposes punishments for breaking the law
crime as public wrong
punishment as incarceration or death
government as prosecutor
proof: beyond a resonable doubt
maindaited requirements for legal compliance
regulation of competition protection of consimers prmotion of equity and safetey protection of the natural environment incentive to encrourage organisational compliance programs to deter misconcts
explain regulating competiton
Rivalry (remember Porter’s 5 forces)
Laws passed to prevent monopolies, inequitable pricing, and other practices that reduce or restrict competition
Sometimes called pro-competitive legislation because they encourage competition and prevent activities that restrain trade
explain gatekeepers and stakeholders
Overseers of business actions
Example: accountants, regulators, lawyers, financial rating firms, auditors
Measure and disclose financial information to the public
Example: risk assessors
Independently access risk, ie Standard & Poors
A group that failed in its duties to stakeholders during the most recent recession because of problems with risk models which led to inaccurate ratings
Are critical in providing accurate information to stakeholders
explain sarbanes oxley act
Established a system of federal oversight of corporate accounting practices
Public Company Accounting Oversight Board (PCAOB) authority to monitor accounting firms that audit public companies
Reduces conflict of interest and increases accountability
Some legal protection for whistleblowers
Jumpstart Our Business Startups (JOBS) Act
benefits from act:
Greater accountability of top managers
Renewed investor confidence
Greater protection of retirement plans
Greater penalties for senior managers
Improved information from stock analysts
Clear explanations by CEOs as to why their compensation package is in the best interest of the company
explain highly appropriate core practices
Focus on sound organizational practices and integrity for performance measures
Not a focus on individual morals
Most ethical issues are non-financial
The Sarbanes-Oxley Act and Dodd-Frank Act provide standards for financial performance
The Integrity Institute developed a model that standardizes measures of non-financial performance
explain volountry responsibility
Business’s contributions to stakeholders
Four major benefits to society Improves communities quality of life Reduces government involvement Develops employee leadership skills Helps create an ethical culture
Cause-related marketing: Ties an organization’s product(s) to a social concern through a marketing program
Strategic philanthropy: The synergistic and mutually beneficial use of core competencies and resources to deal with stakeholders, benefit the company and society
what is caused related markeeting
Ties an organization’s product(s) to a social concern through a marketing program
explain strategic philanthropy
he synergistic and mutually beneficial use of core competencies and resources to deal with stakeholders, benefit the company and society
differenent categories of laws include
consumers
competion
equity and safety
environment
explain laws protecting consumers
Laws protecting consumers require businesses to provide accurate information about products and services and to follow safety standards
The first consumer protection law was passed in 1906 in response to poor working conditions in factories
The FTC’s Bureau of Consumer Protection protects consumers against unfair, deceptive, or fraudulent practices
The FDA regulates food safety, human drugs, and tobacco, among other things
Groups with specific vulnerabilities have higher levels of legal protection
explain laws promoting eqiuty and safety
Laws promoting equity in the workplace protect the rights of minorities, women, older persons, and disabled persons
Title VII of the Civil Rights Act
Equal Employment Opportunity Commission (EEOC)
Affirmative action programs
The Equal Pay Act
Occupational Safety and Health Administration (OSHA) makes inspections to ensure a safe working environment
Many people still work in unsafe environments
Companies may underreport accidents to avoid inspection and regulation
explain environmental legalisation for sustanabiity
Environmental Protection Agency (EPA)
Created to coordinate environmental agencies involved in:
Conducting environmental research
Providing assistance in fighting pollution
Enforcing the nation’s environmental laws
