chapter 2 Flashcards
dont fail (32 cards)
what is ethics?
the study of right & wrong and of the morality of choices people make (an ethical decision is one that is deemed “right” according to some standard of behavior.
what is business ethics?
the application of moral standards to business situations.
where can some ethical issues often arise from? (what are some ethical issues)
out of a business’s relationship with investors, customers, employees, creditors, suppliers, or competitors. (fairness & honesty, organizational relationships, conflicts of interest, communications).
describe what is meant by fairness & honesty
when businesspeople are expected to not knowingly con, deceive, misrepresent, or intimidate others.
(ex: The FTC ruled that Gerber’s claim that its Good Start Gentle formula prevents or reduces allergies lacked scientific evidence and ordered the company to remove it from ads and labels).
describe what is meant by organizational relationships
- when businesspeople should not put their personal welfare on-top of the welfare of others or their organization.
- relationships between co-workers can sometimes create unethical problems, including:
1.not meeting a commitment in a mutual agreement.
2. pressuring others to behave unethically.
3. plagiarism: taking someone else’s words knowingly, or their ideas or any original material without acknowledging the source.
describe what is meant by conflicts of interest
(a conflict of interest in business happens when a person or organization has two or more competing interests that could affect their decisions.)
this occurs when a businessperson takes advantage of a certain situation for their own personal interest rather than for their employer’s interest.
ex: a manager dating an employee they supervise, or a firm advising clients without disclosing its ties to the products it recommends.
some conflicts can happen when payments make their way into business deals, bribes, favors, or payments given with the intent to influence the outcome is illegal in the US and abroad.
describe what is meant by communications
false and or misleading advertising is illegal and not ethical.
ex: health product advertisers must avoid misleading consumers when using terms like “low fat,” “fat free,” and “light.”
what are the 3 factors affecting ethical behavior?
- individual factors:
- how much an individual knows
- core moral beliefs and key values
- personal goals and how they are achieved - social factors:
- cultural norms
- actions and decisions of co-workers
- the values and attitudes of important people in your life (like spouses, friends, and family)
- the use of the internet - opportunity as a factor:
- opportunity: how much freedom an organization gives an employee to act unethically if they choose to
- how strictly the company enforces its policies, procedures, and ethical codes
how can the government encourage ethical behavior?
by enacting more stringent regulations like the ‘Sarbanes-Oxley Act of 2002’ which gives strong legal protection to employees who report corporate wrongdoing.
how does the trade association encourage ethical behavior?
they often provide ethical guidelines for their members.
ex: a pharmaceutical trade group introduced new guidelines to stop sales reps from giving lavish dinners and expensive gifts to doctors to influence their prescriptions.
how do individual companies encourage ethical behavior?
by using a code of ethics; which is a guide to acceptable and ethical behavior as defined by the organization.
about 95% of fortune 1000 firms have a formal code of ethics or conduct.
in the wake of a number of scandals many large companies now created a new executive position called the chief of ethics officer.
what are some more ways individual companies encourage ethical behavior?
whistle-blowing: an employee taking the step to inform the press or government about unethical practices in ones organization.
the ‘Sarbanes-Oxley Act of 2002’ protects whistle-blowers who report these misconducts
federal employees who report misconduct are protected by the ‘Whistleblower Protection Act of 1989.’
what is meant by social responsibility?
acknowledging that business activities do have an impact on society and the consideration of that impact in businesses when decision making.
what is meant by corporate citizenship?
taking a strategic approach to meeting economic, ethical, environmental, and social responsibilities.
means a company acts responsibly and ethically, contributing to society and the environment beyond its legal duties.
what are the 2 views of social responsibility?
- economic model: the belief that society benefits most when businesses are free to produce and sell profitable products that people need.
- socioeconomic model: the idea that businesses should prioritize both profits and the social impact of their decisions on society.
what are some pros of social responsibility?
- because business are apart of our society, they cannot ignore social issues.
- business have the means, technically, financially and managerially to tackle todays complex social issues.
- by helping solve these social issues, the business can make a more stable environment to ensure long-term profits.
- making socially responsible decisions can help companies avoid more government intervention, which would require them to take actions they wouldn’t do otherwise.
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- Better reputation: People think well of the company.
- Loyal customers: Customers stay with the company.
- Happy employees: Employees are motivated and engaged.
- New business opportunities: Company can enter new markets.
- Long-term success: Company is more likely to succeed in the long run.
what are some cons of social responsibility?
- business managers focus mainly on stockholders and must prioritize returns on their investments.
- companies should use their resources to maximize profits, not to address social issues.
- social problems impact society as a whole, so individual businesses shouldn’t be expected to solve them.
- addressing social issues is the responsibility of elected government officials, who are accountable to voters.
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- Higher costs: Social responsibility initiatives can be expensive.
- Reduced profits: Investing in social responsibility might reduce profits for stockholders.
- Time-consuming: Implementing social responsibility programs can take up a lot of time and resources.
- Negative publicity: If not done correctly, social responsibility efforts can lead to negative publicity.
- Conflicting goals: Prioritizing social responsibility might conflict with the goal of maximizing profits.
what is consumerism?
all activities taken to protect the rights of the consumers.
the main issues pursued by the consumer movement fall into three categories:
1. environmental protection
2. product performance and safety
3. information disclosure
what are the basic rights of consumers?
- the right to safety: the products must be safe for their intended use, come with clear instructions, and be tested by the manufacturer for quality and reliability.
- the right to be informed: must have access to complete information about the product before they buy it.
- the right to choose: having choice of products, given by different producers and sellers to satisfy their needs.
- the right to be heard: someone who listens and takes proper actions if the consumers complain.
- the right to consumer education: entitled to be fully informed about their rights as a consumer.
- the right to service: to expect convenience, courtesy, and prompt responses from producers and sellers of products.
what are 3 major consumerism forces?
- Consumer Advocates and Organizations: Groups that protect consumer interests.
- Consumer Education Programs: Teaching people how to make informed buying decisions.
- Consumer Laws: Regulations that protect consumers’ rights.
there is a contention to how far businesses responsibility should go to public health about certain issues, what are they?
- obesity
- smoking
- heart disease
- alcohol use
- smartphone use when driving
what is a minority?
a racial, religious, political, or other group seen and treated differently from a larger group and is often singled out for unfair treatment.
(disparity in income levels for whites, blacks, hispanics, and asians, and lower income levels and higher unemployment rates for Native Americans, people of determination, and women).
what is the Affirmative Action program?
a plan created to increase the number of minority employees at all levels in organizations.
what is the Equal Employment Opportunity Commission (EEOC)?
a government agency with the power to investigate complaints of employment discrimination and the power to sue the firms that practice it.
