Chapter 9: Ethics, Corporate Sustainability, and Strategy Flashcards
(16 cards)
Business ethics
The application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel
Self-dealing
Occurs when managers take advantage of their position to further their own private interests rather than those of the company
3 main drivers of unethical behavior
1) Faulty oversight, enabling the unscrupulous and immoral pursuit of personal gain and other selfish interests
2) Heavy pressures on company managers to meet or beat performance targets
3) A company culture that puts profitability and good business performance over ethical behavior
Visible costs of unethical behavior
1)Gov’t fines and penalties
2) Civil penalties (lawsuits)
3) Costs to shareholders in lower stock prices and dividends
Internal administrative costs of unethical behavior
1) Legal and investigative costs
2) Remedial education and training costs
3) Cost of corrective action
4) Cost for future compliance
Intangible costs of unethical behavior
1) Customer defection
2) Reputation loss
3) Lost employee moral
4) Higher employee turnover
5) Harder to attract and recruit talent
6) Cost of compliance with harsher gov’t regulations
Ethical universalism
The same standards of what is ethical resonate with people of most societies, regardless of local traditions and cultural norms
Ethical relativism
Different cultures create divergent standards of right and wrong - must be judged locally and can vary between nations
Integrative social contracts theory
“first order” universal ethical norms always take precedence over “second order” local ethical norms in circumstances in which local ethical norms are more permissive
Corporate social responsibility (CSR)
Company’s duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities it operates and society at large
CSR Strategy
The specific combo of socially beneficial activities it opts to support with its contributions of time, money, and other resources
Corporate sustainability
The adoption and implementation of a broad range of practices across the environmental, social, and governance (ESG) interfaces of an organization
Triple bottom line
People, planet, profit
Sustainable business practices
Meets the needs of the present without compromising the ability to meet the needs of the future
Environmental sustainability strategies
Deliberate actions to protect the environment, provide for longevity of natural resources, maintain ecological support for future generations, and guard the planet from endangerment
Social impact
Actions that affect stakeholders in the communities where operations are located, address global poverty, or enhance opportunities for employees and underrepresented populations in the workforce
