Flashcards in Ethical Decision Making Deck (128)
It comprises the principles, values, and standards that guide behavior in the world of business.
What is corporate governance?
A formal system of accountability and control of ethical and socially responsible behavior.
Where do stakeholders apply values and standards?
Through working conditions, consumer rights, environmental conservation, product safety, and proper information disclosure.
What are the two kinds of stakeholders and their purposes?
Primary stakeholders are those whose continued association is absolutely necessary for a firm's survival (employees, customers, investors, and shareholders etc.)
Secondary stakeholders do not engage in transactions with a company and are not essential for its survival (AARP or specialty groups)
What is a stakeholder orientation?
The degree to which a firm understands and addresses stakeholder demands.
What are the three activities of the stakeholder orientation?
The organization-wide generation of data about stakeholder groups and assessment of the firm's effects on these groups.
The distribution of this info throughout the firm.
The organization's responsiveness as a whole to this intelligence.
What is social responsibility?
An organizational obligation to maximize its positive impact on stakeholders and to minimize its negative impact.
What are the four levels of social responsibility?
What is corporate citizenship?
The extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities of it's stakeholders.
An organization's greatest intangible asset with tangible value.
What are fudiciaries?
Persons placed in positions of trust who use due care and loyalty in acting on behalf of the best interests of the organization.
What is corporate governance?
A formal system to monitor accountability, oversight, and control.
The two types of directors?
Inside- corporate officers, consultants, major shareholders, or others who benefit directly from the organization's success.
Outside- Persons who bring mor independence to the monitoring function. They are not bound by past allegiances, friendships, or a current role in the company. This prevents conflict of interest.
What is an ethical issue?
A situation, problem, or even an opportunity that requires discussion, thought, or investigation to make a decision.
What is collusion?
A secret agreement between two or more parties for a fraudulent, illegal, or deceitful purpose.
What is an ethical dilemma?
A problem, situation, or opportunity that requires an individual, group, or organization to choose among several wrong or unethical actions.
The two types of bribery?
Active- the person who gives the bribe.
Passive- the person who receives or accepts the bribe.
What is corporate intelligence?
A collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends.
The Kyoto Protocol
An international treaty on climate change committed to reducing emissions of carbon dioxide and five other greenhouse gases and to engaging in emissions trading if member signatories maintain or increase emissions of these gases.
What are the three categories of false or misleading advertisements?
Puffery- exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely on.
Implied Falsity- a tendency to mislead, confuse, or deceive the public.
Literal Falsity- Tests Prove: the advertisement cites a study or test that establishes the claim.
Bald Assertions: a claim that cannot be substantiated.
Duplicity and Guile
Duplicity- example: a customer who stages an accident and then seeks damages against the store.
Guile- example: a crafty customer who understands right/wrong behavior but uses tricks to obtain an unfair advantage.
Illegal insider trading is the buying or selling of stocks by insiders who possess material that is still not public.
Legal insider trading involves buying and selling stock in an insider's own company, but not all the time.
Involves the legal protection of intellectual properties such as music, books, and movies.
The three types of fraud
What are the three dimensions required for an effective organizational practice of business ethics?
Legal- society's codification of what is wrong and right.
Voluntary- includes the beliefs, values, and voluntary contractual obligations of a business.
Core practices- appropriate and common practices that help ensure compliance with legal requirements and societal expectations.
Norms dictate and clarify desirable behaviors through principles, rules, policies, and procedures.
What is civil law?
The rights and duties of individuals and organizations.
Prohibits specific actions-such as fraud, theft, or securities trading violations-but also imposes fines or imprisonment as punishment.
What are the laws and regulations that govern business activities?
Hint: there are five.
Regulation of competition
Protection of consumers
Promotion of equity and safety
Protection of the natural environment
Incentives to encourage organizational compliance programs to deter misconduct.