Chapter 4 Flashcards by Matthew Luce

What are the three dimensions of institutionalizaion of business ethics

Voluntary Practices
Core Practices
Mandated Boundaries

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Beliefs, values, and

voluntary contractual obligations of a business

voluntary practices

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

core practices

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

mandated boundaries

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What do Government established laws/regulations

Set minimum compliance

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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

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

Regulating competition/procompetitive

legislation

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

Protecting consumers

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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

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Groups with specific vulnerabilities have

higher levels of legal protection

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is the glue that holds businesses and

their stakeholders together

trust

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Overseers of business actions (Accountants, regulators, etc

Gatekeepers

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authority to monitor

accounting firms that audit public companies

Public Company Accounting Oversight

Board (PCAOB)

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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

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

Cause-related marketing:

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

Strategic philanthropy:

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How are business ethics institutionalized

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

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The ethical decision making process includes

Ethical issue intensity
 Individual factors
 Organizational factors

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

Ethical Issue Intensity

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What triggers ethical decision making process

Ethical Issue Intensity

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Individuals are subject to six spheres of

influence…

Workplace Legal system
Family Community
Religion Profession

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

Moral Intensity

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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

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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

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

External Locus

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

Internal Locus

Organizational culture has a stronger influence on employees than individual values

Organizational Factors

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

corporate culture

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

Ethical Culture

Those who have | influence in a work group

Significant Others

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

Obedience to authority

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

 Immediate job context:  Opportunities  Knowledge

How organizational decision makers should approach an issue

Normative approaches

examines how organizational decision makers | approach ethical decision making

descriptive

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

normative

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

Rawls

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

Two main principles of justice…

Liberty Principle and Difference Principal

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

Liberty Principle

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

Difference principle:

What do economic systems do?

allocate resources/products

What do economic systems affect, and are affected by?

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

Values that | can be quantified by monetary means

Economic value orientation:

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

Idealism

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

Realism

believe that only one thing is | intrinsically good

Monists

Pleasure is the ultimate good

Hedonism

believe that no one thing is | intrinsically good

Pluralists

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

instrumentalism

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

goodness theories

Emphasize the means | and motives by which actions are justified

Obligation Theories

What are the two types of Obligation theories?

Teleological and Deontological

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

teleology

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

Telelogical; consequentialism

Two important teleological philosophies are

egoism and utilitarianism

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

egoism

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

enlightened egoists

seeks the greatest good | for the greatest number of people

utilitarianism

Determine behavior based on principles designed to promote the greatest utility

Rule utilitarians

Examine a specific action | itself; not the rules governing it

Act Utilitarians

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

Deontology

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

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

Immanuel Kant--Categorical Imperative

Conformity to general | moral principles determines ethicalness

rule deontology

Actions are the proper | basis on which to judge morality

act deontology

Individuals and groups derive definitions of ethical behavior subjectively from experience

relativism

Relates to | observations of other cultures

Descriptive relativism

Proposes people | see situations from their own perspectives

Metaethical relativism:

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

Normative relativism

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

Virtue Ethics

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

justice

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

An evaluation of the | results of a business relationship

Distributive justice:

Considers the processes | and activities that produce desired outcomes

Procedural justice:

Based on relationships between organizational members, including employees and managers

Interactional justice:

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

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

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

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

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

White Collar Crime

The _________ sector has a high level of WCCs

Financial

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

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

performance goals

Chapter 4 Flashcards

(83 cards)