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1

What are the three dimensions of institutionalizaion of business ethics

Voluntary Practices
Core Practices
Mandated Boundaries

2

Beliefs, values, and
voluntary contractual obligations of a business

voluntary practices

3

Documented best practices,
often encouraged by legal and regulatory forces
and trade associations

core practices

4

Externally imposed
boundaries of conduct (e.g. laws, rules,
regulations and other requirements)

mandated boundaries

5

What do Government established laws/regulations

Set minimum compliance

6

What are the five categories of laws?

 Regulating competition
 Protecting consumers
 Promoting equity and safety
 Protecting the environment
 Incentives to encourage organizational
compliance programs to deter misconduct

7

Laws passed to prevent monopolies,
inequitable pricing, and other practices
that reduce or restrict competition

Regulating competition/procompetitive
legislation

8

require businesses
provide accurate information about products
and services and follow safety standards

Protecting consumers

9

The FTC’s Bureau of Consumer Protection guards
against unfair, deceptive, or fraudulent practices
 The FDA regulates food safety, human drugs, and
tobacco, among other things

a

10

Groups with specific vulnerabilities have
higher levels of legal protection

a

11

is the glue that holds businesses and
their stakeholders together

trust

12

Overseers of business actions (Accountants, regulators, etc

Gatekeepers

13

authority to monitor
accounting firms that audit public companies

Public Company Accounting Oversight
Board (PCAOB)

14

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

15

Ties an
organization’s product(s) to a social concern
through a marketing program

Cause-related marketing:

16

The synergistic and
mutually beneficial use of core competencies
and resources to deal with stakeholders,
benefit the company and society

Strategic philanthropy:

17

How are business ethics institutionalized

Involves embedding values, norms, and
artifacts in organizations, industries, and
society

18

The ethical decision making process includes

Ethical issue intensity
 Individual factors
 Organizational factors

19

The perceived relevance or importance of
an ethical issue to the individual, work
group, and/or organization

Ethical Issue Intensity

20

What triggers ethical decision making process

Ethical Issue Intensity

21

Individuals are subject to six spheres of
influence…

Workplace Legal system
Family Community
Religion Profession

22

Relates to a person’s
perception of social pressure and the harm
his/her decision will have on others

Moral Intensity

23

Research shows that various factors influence
ethical behavior

 Gender—women are more ethical than men
 Education, work experience, nationality, and age
affect ethical decision making

24

Relates to individual differences in
relation to a general belief about how one
is affected by internal versus external
events or reinforcements

locus of control

25

go with the flow
because that’s all they can do

External Locus

26

believe they can
control events; are masters of their destinies and
trust in their capacity to influence their
environment

Internal Locus

27

Organizational culture has a stronger
influence on employees than individual
values

Organizational Factors

28

A set of values, norms,
and artifacts that members of an
organization share

corporate culture

29

Reflects whether the firm has an
ethical conscience; is a function of many factors

Ethical Culture

30

Those who have
influence in a work group

Significant Others

31

Helps to explain
why many employees unquestioningly follow
superior’s orders

Obedience to authority

32

The conditions in an organization that
limit/permit ethical/unethical behavior

 Immediate job context:
 Opportunities
 Knowledge

33

How
organizational decision makers should
approach an issue

Normative approaches

34

examines how organizational decision makers
approach ethical decision making

descriptive

35

Concepts like fairness and justice are highly
important in a _____ structure

normative

36

was one of the most influential
philosophers in his research on how
principles support the concept of justice

Rawls

37

A thought experiment that
examined how individuals would formulate
principles if they did not know what their
future position in society would be

veil of ignorance

38

Two main principles of justice…

Liberty Principle and Difference Principal

39

States that
each person has basic rights that are compatible
to the basic liberties of others

Liberty Principle

40

States that economic and
social equalities (or inequalities) should be
arranged to provide the most benefit to the leastadvantaged
members of society

Difference principle:

41

What do economic systems do?

allocate resources/products

42

What do economic systems affect, and are affected by?

Individual’s actions and beliefs (morals)
 Society (laws) as a whole

43

Values that
can be quantified by monetary means

Economic value orientation:

44

Places special value on ideas and
ideals as products of the mind (+ Correlation with ethical decision making)

Idealism

45

The view that an external world
exists independent of our perceptions, self-interest, negative correlation

Realism

46

believe that only one thing is
intrinsically good

Monists

47

Pleasure is the ultimate good

Hedonism

48

believe that no one thing is
intrinsically good

Pluralists

49

rejects the ideas that
 Ends can be separated from the means
 Ends, purposes, or outcomes are intrinsically good
in and of themselves

instrumentalism

50

Focus on the end result
of actions and the goodness or happiness
created by them

goodness theories

51

Emphasize the means
and motives by which actions are justified

Obligation Theories

52

What are the two types of Obligation theories?

Teleological and Deontological

53

Considers acts as morally right or
acceptable if they produce a desired result

teleology

54

_______ philosophies assess the moral
worth of a behavior by looking at the
consequences, so these theories are often
referred to as ________

Telelogical; consequentialism

55

Two important teleological philosophies are

egoism and utilitarianism

56

defines right or acceptable behavior
in terms of consequences to the individual

egoism

57

Take a long-term
perspective and allow for the well-being of
others though their own self-interests remain
paramount

enlightened egoists

58

seeks the greatest good
for the greatest number of people

utilitarianism

59

Determine behavior
based on principles designed to promote the
greatest utility

Rule utilitarians

60

Examine a specific action
itself; not the rules governing it

Act Utilitarians

61

Moral philosophies focusing on the rights
of individuals and on the intentions
associated with a particular behavior

Deontology

62

What are three major beliefs of deontology

Believe individuals have certain absolute rights
 Believe compliance with stable moral principles
defines ethicalness
 Sometimes referred to as nonconsequentialism,
a system of ethics based on respect for persons

63

Ethical acts can be viewed by everyone and the
rationale behind the act is suitable as a universal
principle

Immanuel Kant--Categorical Imperative

64

Conformity to general
moral principles determines ethicalness

rule deontology

65

Actions are the proper
basis on which to judge morality

act deontology

66

Individuals and groups derive definitions
of ethical behavior subjectively from
experience

relativism

67

Relates to
observations of other cultures

Descriptive relativism

68

Proposes people
see situations from their own perspectives

Metaethical relativism:

69

Assumes one
person’s opinion is as good as another’s

Normative relativism

70

Ethical behavior follows conventional
moral standards and compares behavior
against a standard “good” moral character

Virtue Ethics

71

How can Virtue Ethics be summarized?

 Good corporate ethics programs encourage
individual virtue and integrity
 The virtues associated with appropriate conduct
form a good person
 The ultimate purpose is to serve the public good
 The well-being of the community goes together
with individual excellence

72

justice

Fair treatment and due reward in
accordance with ethical or legal standards

73

An evaluation of the
results of a business relationship

Distributive justice:

74

Considers the processes
and activities that produce desired outcomes

Procedural justice:

75

Based on relationships
between organizational members, including
employees and managers

Interactional justice:

76

Six Stages of Kohlberg's model of Cognitive Moral Development

1. Punishment and obedience
2. Individual instrumental purpose and
exchange
3. Mutual interpersonal expectations,
relationships, and conformity
4. Social system and conscience maintenance
5. Prior rights, social contract, or utility
6. Universal ethical principles

77

How can Kohlberg's model be reduced to three levels of ethical concern

Concern with immediate interests and
rewards and punishments
2. Concern with right as expected by the larger
society or some significant reference group
3. Seeing beyond norms, laws, and the
authority of groups or individuals

78

What can we learn from Kohlberg's theory?

 Shows that individuals can change their values
through moral development
 Supports management’s development of
employee’s moral principles

79

What are the three weaknesses of Kohlberg's CMD theory?

 Kohlberg used questionable research methods
 His theory contradicts basic moral philosophy
 His theory, while reliable, may not be valid

80

Illegal acts committed for personal and/or
organizational gain by abusing the trust and
authority associated with a given position

White Collar Crime

81

The _________ sector has a high level of WCCs

Financial

82

What are four possible reasons for WCC

Patterns of activities become institutionalized
and may encourage unethical behaviors
 Undecided employees go along with the
majority, whether ethical or unethical
 WCCs increase after economic recessions
 Some businesspeople may have inherently
criminal personalities, corporate psychopaths

83

Most unethical behavior is not for personal
gain, but to meet

performance goals