Chapter 11

Question 1

What are Societal Forces?

Answer 1

1. Society is: you and me, groups, people, everyone really
2. Customer Preferences (on what to buy)
   Online shopping
   Convenience
   Examples: Healthier eating. Eg. Less pop, more water options
3. Influences/opinions
   What does societal expect from business?
4. Moral behaviour? Ethical behaviour
   What does society expect?

Question 2

Ethics at Work

Answer 2

Do organizations make us unethical?

There are countless theories that attempt to answer this question. Some suggest that self-interest is a major influence on unethical behaviour. For example, based on agency theory, it is argued that when agents (employees) possess more information than principals (employers) and their goals conflict, agents may behave in accordance with their self-interest and, thereby, such individuals may deceive the principal.
Other scholars have accused individuals (human agents) of being “pure egoists” whose behaviour typically reflects a desire to maximize their own utility.

Question 3

Ethics

Answer 3

is the study of morality or moral judgments, standards, and rules of conduct.

Question 4

business ethics

Answer 4

has been considered as comprising the rules, standards, principles, or codes giving guidelines for morally right behaviour in certain contexts.

Question 5

Models for Making Ethical Decisions:

Answer 5

1. Utilitarian or end-point ethics
   (John Stuart Mills)
2. Rule ethics

Question 6

Utilitarian or End-point Ethics

Answer 6

To determine if an action is right or wrong, one must examine the “end result” or “likely consequences” of an action:

Tangible economic outcomes
(shareholder profit)

Intangible outcomes (happiness or friendship)

Question 7

Utilitarian or End-point Ethics pt.2

Answer 7

Must achieve the “greatest amount of good for the greatest number of people.”

If achieved, then the action is “ethical.”
Auto maker Example: Cost-benefit analysis
- legal costs and damages due to lost lives in car accidents versus costs of car recalls with faulty parts.

Question 8

Limitations:

Answer 8

The difficulty in estimating or measuring relative benefits and costs to all stakeholders affected.

The “process” or means to achieve the results is ignored.

Question 9

Rule Ethics

Answer 9

An action is “ethical” based on:

Rules and principles that guide behaviour;

Religious beliefs, family values, cultural values etc on what is morally right versus wrong; and

What is morally acceptable to the larger community?

Cannot be applied universally.

Everyone has a different perspective.

Obligations may override ethics.

Rules may not be applied consistently to our professional versus personal lives.

Question 10

What is a bribe?

Answer 10

Something that influences you to take an action, you would have not otherwise taken.

How much will it take to influence you?
Lunch $20
Sports tickets (valued at $200)
$400,000 in cash

Question 11

What is Illegal?

Answer 11

The amount of the bribe.

Forging documents (misrepresenting yourself)

Question 12

Factors affecting Decisions to Engage in Ethical or Unethical Behaviour:

Answer 12

1. Corporate Culture
2. Decoupling
3. Job Routinization
4. Organizational Identity
5. Work Roles

Question 13

1. Corporate Culture - Organizational culture (Definition)

Answer 13

a set of shared beliefs regarding how members of the organization should behave and what goals they should seek.

an intangible, abstract component of any organization.

an organizational reality within which ethically relevant actions are discussed, judged, and legitimized.

Question 14

Codes of Conduct

Answer 14

Corporate codes of conduct are one of the most common methods used by the business community to improve ethical conduct. These rules are intended to reflect the general values of society. Codes of ethics are one means of “institutionalizing” ethics in corporations.

Research has supported the notion that the moral atmosphere affects moral reasoning and moral judgment. Research studies have indicated that when an informal or formal organizational policy was present, ethical behaviour increased and unethical behaviour was deterred.

Question 15

2. Decoupling

Answer 15

Organizations sometimes try to cover up inefficiencies by separating, or decoupling, the behaviour from its evaluation. The notion of decoupling suggests that organizations can conduct themselves in ways that hide activities that would otherwise be considered unacceptable if they were subjected to closer scrutiny.

Consequently, this suggests that employees will be encouraged to engage in unethical behaviour where that behaviour has been legitimized as accepted business practice and where behaviour and evaluation of that behaviour are decoupled.

Example: Corporate spying vs. market research

Question 16

3. Job Routinization

Answer 16

The legitimization of acceptable behaviour can extend to the actual job itself—how the work is performed. The organization may generate routinized work procedures that are viewed as legitimate since they follow an acceptable set of rules.

What is the impact of such habitual routines on ethical behaviour in organizations? The everyday patterns of work can create blind spots when it comes to identifying the ethical implications of our actions. Gersick and Hackman assert that, over time, we develop a set of patterns or routines in dealing with the responsibilities of our job. One consequence of this is a reduction in the level of scrutiny of the moral implications of our everyday work decisions.

For example, consider a situation involving an engineer who habitually performs a safety check on the construction standards of a building plan. The engineer performs all the checks in accordance with the professional or legal requirements, while neglecting to consider nonroutine indicators of potential risk in the construction. Certainly, there is an ethical or moral dimension to decisions or practices that can affect the well-being of others: The duty of care in performance that exists beyond strict legal requirements can be considered an ethical concern.

In the case of the engineer, strict adherence to habitual routines permits unethical behaviour to occur because of the failure to critically analyze the ethical implications of a workplace behaviour—that is, to consider the welfare of all parties potentially affected by the behaviour.

Question 17

4. Organizational Identity

Answer 17

When we identify with our organizations, we tend to become less critical of its policies and behaviour. The notion that identification with the organization restricts or discourages evaluations or perceptions that might reflect poorly on the organization has clear ethical implications.

Indeed, at the extreme, there is research to suggest that employees will engage in unethical behaviour at the request of authority figures. In addition to the influence of authority figures, the research has explored the effects of peers on ethical behaviour. In fact, many researchers have suggested that unethical behaviour is learned in the process of interacting with individuals who are part of intimate personal groups or role sets.
“I am just doing my job” what I’ve been told to do.

Question 18

Social identity theory

Answer 18

posits that individuals classify themselves and others into social categories (organizational membership, age, gender, and so on) that are defined by the typical characteristics abstracted from the members. Organizational identification is a specific form of social identification. Individuals can identify with elements of the organization that have been reified—that is, that have become embodiments of the characteristics perceived as typical of its members: “I work for Apple,” “I am a lawyer,” and so on. These are all statements of identity based on an organization or a profession.

Question 19

5. Work Roles

Answer 19

Organizational role theory proposes that individuals in organizations occupy positions or roles that involve a set of activities, including interactions with others, that are required or expected as part of the job. Individuals fulfill role requirements based on internalized expectations concerning the responsibilities of the role.

What are the implications of organizational roles for the ethical behaviour of individuals occupying those roles?

Kahn and colleagues identified several forms of role conflict, including inter-role conflict, which refers to the competing demands of two or more roles that an individual occupies.
Consider the case of an employee in the role of salesperson who must decide whether the role responsibility of reaching the sales target at all costs should take priority over his role as an honest citizen.

Question 20

Organizational role theory

Answer 20

proposes that individuals in organizations occupy positions or roles that involve a set of activities, including interactions with others, that are required or expected as part of the job. Individuals fulfill role requirements based on internalized expectations concerning the responsibilities of the role.

Question 21

How should business manage stakeholder interests?

Answer 21

Unethical behaviour may be directed against the organization itself, or it may be consistent with the organization’s goals but inconsistent with commonly accepted ethical principles. Whether unethical behaviour comes in the form of subtle discrimination against other employees, “padding” expense accounts, paying or accepting bribes, questionable advertising, or other forms of fraudulent activity, there is little doubt that the costs of such behaviour eventually accumulate.

Question 22

Who are the stakeholders of business?

Answer 22

External stakeholders
1. Governments
2. Consumers
3. Community Members

Internal stakeholders
1. Business owners
2. Employees

Question 23

corporate social responsibility (CSR)

Answer 23

refers to those obligations or responsibilities of an organization that involve going beyond the production of goods or services at a profit and the requirements of competition, legal regulations, or customs. Social responsibility involves an obligation to create policies, make decisions, and engage in actions that are desirable in terms of society’s values and objectives.

Question 24

Economic Responsibilities

Answer 24

Generate rational business strategy, make profits, minimize costs

Question 25

Legal Responsibilities

Answer 25

Honour all relevant laws and regulations governing business activities

Question 26

Ethical Responsibilities

Answer 26

Engage is business practices that are in line with what society considers acceptable fair and just

Question 27

Philanthropic Responsibilities

Answer 27

Engage in activities that help the betterment of society

Question 28

Against Social Responsibility

Answer 28

1. Business is Business
2. Business plays by its own rules
3. Business should not dictate morality
4. Organizations cannot be held accountable for their actions
5. High cost are passed to the consumer

Question 29

For Social Responsibility

Answer 29

1. Business should conform to societal expectations
2. CSR is a practical strategy
3. Business must acknowledge its network of shareholders
4. There are long-term benefits to be gained from CSR
5. Business has the power and resources to do good

Question 30

Is Corporate Social Responsibility on the Rise?

Answer 30

Social Media

Corporate Disclosure Legislation

CSR rankings

Question 31

Corporate disclosure legislation

Answer 31

How corporations govern and oversee their own behaviour has been a central issue in today’s business environment. The long list of corporate scandals has drawn attention to this notion of who safeguards the interests of owners and shareholders of large corporations. Recent legislation has attempted to hold organizations more accountable for their behaviour and to offer greater disclosure of their activities to the public.

Question 32

CSR Rankings

Answer 32

In recent years, companies have also been driven to increase their social responsibility because it improves their public image and brand value. How much social responsibility is required is difficult to determine, but some research groups have published CSR rankings that recognize Canadian companies for their good deeds.