MGT 340 Flash Card, Quiz, and Notes from PPT

Question

chapter 2 | notes from PPT

Answer 1

Relationships and Business Relationships are associated with both organizational success and misconduct. why business exists? because the organizational relationships exist between employees, customers, shareholders, and the community shareholder framework: Internal and external shareholders agree, collaborate, and engage in confrontations on ethical issues. (• Allows organizations to identify, monitor, and respond to the needs and expectations of stakeholder groups.) Stakeholders Define Ethical Issues in Business: • Approaches to stakeholder theory: 1. Normative: Identifies ethical guidelines that dictate how firms should treat stakeholders. 2. Descriptive: Focuses on the firm’s behavior; addresses how decisions are made for stakeholder relationships. 3. Instrumental: Describes what happens if firms behave in a particular way • Primary stakeholders • Those whose continued association and resources are absolutely necessary for a firm’s survival (customers, shareholders, employees, suppliers). • Secondary stakeholders • Those who are not typically engaged directly in transactions with a company and are therefore not essential to its survival (government agencies and communities). • Other stakeholders • Others who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes are known as stakeholders. Stakeholder Interaction Model: • Reciprocal relationships between the firm and a host of stakeholders. • Recognizes other stakeholders; explicitly acknowledges dialogue exists between a firm’s internal and external environments Stakeholder Orientation: • Activities to address stakeholder demands: 1. Organization-wide generation of data about stakeholder groups and assessment of the firm’s effects on these groups; 2. Distribution of this information throughout the firm; and 3. Responsiveness of the organization as a whole to this information. • Can be viewed as a continuum. • Firms likely to adopt the concept to varying degrees. • To gauge a firm’s stakeholder orientation: • Evaluate the extent the firm adopts behaviors that typify the generation. • An organization may generate and disseminate more intelligence about some stakeholder communities than others Social Responsibility and Business Ethics • Social responsibility: An organization’s obligation to maximize its positive impact on stakeholders and minimize its negative impact. • Four levels of social responsibility: 1. Economic 2. Legal 3. Ethical 4. Philanthropic Corporate Citizenship: meet the economic, legal, ethical, and philanthropic responsibilities placed on them by various stakeholders. • Four interrelated dimensions: 1. Strong sustained economic performance. 2. Rigorous compliance. 3. Ethical actions beyond what the law requires. 4. Voluntary contributions that advance the reputation and stakeholder commitment of the organization. • Reputation is one of an organization’s greatest intangible assets with tangible value. Corporate Governance Provides Formalized Responsibility to Stakeholders • The stakeholder model places the board of directors in the position of balancing the interests and conflicts of a company’s various constituencies. • External control of the corporation resides not only with government regulators but also with key stakeholders which exert pressure for responsible conduct. • Social responsibility activities have a positive impact on consumer identification. Views of Corporate Governance: • Classic agency problem: Ownership (investors) and control (managers) are separate. • Managers act as agents for investors, whose primary goal is increasing the value of the stock. • Investors and managers are distinct parties with unique insights, goals, and values. • Corporate governance mechanisms are needed to align investor and management interests. Board of Director Responsibilities: • Greater demands for accountability and transparency. Ensure the corporations are run in an ethical manner. • Duty of loyalty. All decisions should be in the best interests of the corporation. • Knowledge about the investments, business ventures, and stock market information of a company creates issues that could violate their duty of loyalty. • Executive compensation. Avoid the opportunity to vote for others’ compensation in return for their own increased compensation. • Organizational ethics. Receive training to increase competency in ethics program development. • Audit committee. Address issues such as whistleblower claims, cyber security, and bribery. • Accountability. Oversight for system of checks and balances that limit employees’ and managers’ opportunities to deviate from policies and strategies aimed at preventing unethical and illegal activities. Demand for Accountability and Transparency: • Directors chosen for expertise, competence, and ability to bring diverse perspectives. • Outside directors do not have vested interest. • Interlocking directorate: Board members linked to more than one company. • Legal unless it involves a direct competitor Executive Compensation: • Compensation paid to top executives of the company. • Ratio of the salaries of the highest-paid executives to the median employee wage should be less. • Stakeholders support high level of compensation only when it is linked to strong company performance. Implementing a Stakeholder Perspective (6 steps): Step 1: Assessing the Corporate Culture • Identify the organizational mission, values, norms, and behavior likely to have implications for social responsibility. Step 2: Identifying Stakeholder Groups • Recognize stakeholder needs, wants, and desires. Step 3: Identifying Stakeholder Issues Step 4: Assessing Organizational Commitment to Stakeholders and Social Responsibility • Used to evaluate current practices and to select concrete social responsibility initiatives. • Social responsibility disclosures in company annual reports are directly related to the quality of corporate governance. Step 5: Identifying Resources and Determining Urgency • Two main criteria: Level of financial and organizational investments required by different actions and urgency when prioritizing social responsibility challenges. • When the challenge under consideration is viewed as significant and stakeholder pressures on the issue can be expected, the challenge is considered urgent. Step 6: Gaining Stakeholder Feedback • General assessment of a firm and its practices can be obtained through satisfaction or reputation surveys. • To gauge stakeholders’ perceptions of a firm’s contributions to specific issues, stakeholder generated media such as blogs, websites, podcasts, and newsletters can be assessed. • Formal research may be conducted using focus groups, observation, and surveys.

Answer 2

stakeholders Definition: Customers, shareholders, employees, suppliers, government agencies, communities, and many others who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes Primary stakeholders Definition: Those whose continued association and resources are absolutely necessary for a firm’s survival Secondary stakeholders Definition: Do not typically engage directly in transactions with a company and are therefore not essential to its survival stakeholder interaction model Definition: This approach recognizes other stakeholders and explicitly acknowledges that dialogue exists between a firm’s internal and external environments stakeholder orientation Definition: The degree to which a firm understands and addresses stakeholder demands corporate citizenship Definition: The extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by various stakeholders Reputation Definition: A corporation’s image and an intangible asset with tangible value Corporate governance Definition: The development of formal systems of accountability, oversight, and control shareholder model of corporate governance Definition: Founded in classic economic precepts, including the goal of maximizing wealth for investors and owners stakeholder model of corporate governance Definition: A broader view of the purpose of business that considers stakeholder welfare in tandem with corporate needs and interests interlocking directorate Definition: The concept of board members being linked to more than one company executive compensation Definition: How executives are compensated for their leadership, organizational service, and performance

Answer 3

Ethical Awareness • People make ethical decisions when they find an ethical component in a particular issue or situation. • Failure to acknowledge or be aware of ethical issues is hazardous to an organization. • Ethical issues involve a group, a problem, or an opportunity that requires introspection and investigation before a decision can be made. Foundational Values for Identifying Ethical Issues • Integrity: Element of virtue, an unimpaired condition. Integrity relates to product quality, open communication, transparency, and relationships. • Honesty: Truthfulness or trustworthiness. To tell the truth to the best of your knowledge without hiding anything. • Confucius defined an honest person as junzi, or one who has the virtue ren. • Honesty • Ren: One who has humanity. • Yi: What one should do according to the relationships with others. • Li: Good manners or respect. • Zhi: Whether a person knows what to say and what to do as it relates to honesty • Honesty • The Confucian version of Kant’s Golden Rule is to treat your inferiors as you would want your superiors to treat you. • Virtues such as familial honor and reputation for honesty are paramount. • Lying: (1) Untruthful statements that result in damage or harm; (2) “white lies,” which do not cause damage but instead function as excuses or a means of benefitting others; and (3) statements obviously meant to engage or entertain without malice. Foundational Values Continued • Fairness: Just, equitable, and impartial. • Three fundamental elements that motivate people to be fair: 1. Equality: The distribution of benefits and resources. 2. Reciprocity: An interchange of giving and receiving in social relationships. 3. Optimization: Trade-off between equity (equality) and efficiency (maximum productivity). Ethical Issues in Business • Misuse of Company Time and Resources • Abusive or Intimidating Behavior: Actions such as physical threats, false accusations, and yelling. Meaning differs from person to person. • Bullying: Creates hostile environment. Workplace bullying is strongly associated with sleep disturbances, as well as depression, fatigue, increased sick days, and stomach problems. • Lying 1. Joking without malice. 2. Commission lying: Creating a perception or belief by words that intentionally deceive the receiver of the message. 3. Omission lying: Intentionally not informing others of any differences, problems, safety warnings, or negative issues relating to the product or company that significantly affect awareness, intention, or behavior. • Conflicts of Interest: Individual chooses either to advance his or her own interests, those of the organization, or those of some other group. • Bribery: Offering something (often money) in order to gain an illicit advantage from someone in authority. • Active bribery: The person who promises or gives the bribe commits the offense. • Bribery • Passive bribery: Offense committed by an official who receives the bribe. • Not an offense if the advantage was permitted or required by the written law or regulation of the foreign public official’s country, including case law. • Small facilitation payments: Payments made to obtain or retain business or other improper advantages—do not constitute bribery payments for U.S. companies in some situations. • Often made to induce public officials to perform their functions. • Illegal in the United Kingdom • Corporate Intelligence: Collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends. • Three types: • Passive monitoring system for early warning. • Tactical field support. • Support dedicated to top-management strategy. • Discrimination: On the basis of race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status is illegal in the United States. • Discrimination on the basis of political opinions or affiliation with a union is defined as harassment. • Equal Employment Opportunity Commission • Age Discrimination in Employment Act: Illegal to discriminate against people 40 years of age or older, as well as those that require employees to retire before the age of 70. • Affirmative Action Programs: Involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics. • Affirmative Action Programs and Supreme Court Standards 1. There must be a strong reason for developing an affirmative action program. 2. Affirmative Action Programs must apply only to qualified candidates. 3. Affirmative Action Programs must be limited and temporary and therefore cannot include “rigid and inflexible quotas.” • Sexual Harassment: Any repeated, unwanted behavior of a sexual nature perpetrated upon one individual by another. • May be verbal, visual, written, or physical. • Can occur between people of different genders or those of the same gender. • The law is primarily concerned with the impact of the behavior and not its intent (Title VII of the Civil Rights Act of 1964). • Hostile work environment—three criteria must be met. The conduct was: 1. Unwelcome. 2. Severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment. 3. Such that a reasonable person would find it hostile or offensive. • Hostile work environment • Employee need not prove the harassment seriously affected his or her psychological wellbeing or that it caused an injury. • Decisive issue is whether the conduct interfered with the claimant’s work performance. • Dual relationship: A personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities. • If the sexual advances in any form are considered mutual, then consent is created. • Unless the employee or employer gets something in writing before the romantic action begins, consent can always be questioned. Ways to Avoid Sexual Misconduct 1. Establish a statement of policy naming someone in the company as ultimately responsible for preventing harassment at the company. 2. Establish a definition of sexual harassment that includes unwelcome advances, requests for sexual favors, and any other verbal, visual, or physical conduct of a sexual nature; that provides examples of each; and reminds employees the list of examples is not all-inclusive. 3. Establish a non-retaliation policy that protects complainants and witnesses. 4. Establish specific procedures for prevention of such practices at early stages. If in writing, they are expected by law to train employees in accordance with them, measure their effects, and ensure the policies are enforced. 5. Establish, enforce, and encourage victims of sexual harassment to report the behavior to authorized individuals. 6. Establish a reporting procedure. 7. Make sure the firm has timely reporting requirements to the proper authorities. • Fraud: Any purposeful communication that deceives, manipulates, or conceals facts in order to harm others. Can be a crime; convictions may result in fines, imprisonment, or both. • Accounting fraud: Usually involves a corporations’ financial reports. • Fraud triangle: Pressure, opportunity, and rationalization. • Marketing fraud: Dishonestly creating, distributing, promoting, and pricing products. • Puffery: Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely upon and is not actionable under the Lanham Act. • Implied falsity: The message has a tendency to mislead, confuse, or deceive the public. • Literally true but imply a false message. • Literally false • Tests prove (establishment claims): Advertisement cites a study or test that establishes the claim. • Bald assertions (nonestablishment claims): Advertisement makes a claim that cannot be substantiated. • Labeling Issues • Kroger agreed to remove “raised in a humane environment” from its packages of chicken. • Consumer Fraud: When consumers attempt to deceive businesses for their own gain. • Shoplifting • Collusion: An employee assists the consumer in fraud. • Duplicity: Consumer stages an accident in a store and then seeks damages against the store for its lack of attention to safety. • Guile: A person who is crafty or understands right/wrong behavior but uses tricks to obtain an unfair advantage. • Insider Trading: An insider is any officer, director, or owner of 10 percent or more of a class of a company’s securities. • Illegal insider trading: The buying or selling of stocks by insiders who possess information that is not yet public. • Legal insider trading: Legally buying and selling stock in an insider’s own company, but not all the time. Insiders are required to report their insider transactions within two business days of the date the transaction occurred. • Intellectual Property Rights: Legal protection of intellectual property—music, books, and movies. • Copyright Act of 1976 • Digital Millennium Copyright Act of 1998 • Digital Theft Deterrence and Copyright Damages Improvement Act of 1999

Answer 4

Integrity Definition: Implies a balanced organization that not only makes ethical financial decisions but also is ethical in the more subjective aspects of its corporate culture Honesty Definition: Refers to truthfulness or trustworthiness Fairness Definition: The quality of being just, equitable, and impartial equality Definition: Is about the distribution of benefits and resources Reciprocity Definition: An interchange of giving and receiving in social relationships Optimization Definition: The trade-off between equity (equality) and efficiency (maximum productivity) ethical issue Definition: A problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical ethical dilemma Definition: Is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that have negative outcomes Abusive or intimidating behavior Definition: A common ethical problem for employees that may refer to physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, ignoring someone, and unreasonableness lying Definition: Untruthfulness that can be joking without malice, commission lying, and omission lying conflict of interest Definition: When an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group Bribery Definition: Is the practice of offering something (often money) in order to gain an illicit advantage from someone in authority active bribery Definition: The person who promises or gives the bribe commits the offense Passive bribery Definition: Offense committed by the official who receives the bribe facilitation payments Definition: Payments made to obtain or retain business or other improper advantages that do not constitute bribery payments for U.S. companies in some situations corporate intelligence Definition: The collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends Hacking Definition: Breaking into a computer network to steal information System hacking Definition: Assumes the attacker already has access to a low-level, privileged-user account Remote hacking Definition: Involves attempting to remotely penetrate a system across the Internet Physical hacking Definition: Requires the hacker to enter a facility physically and find a vacant unsecured workstation with an employee’s login and password Social engineering Definition: Tricking individuals into revealing their passwords or other valuable corporate information Shoulder surfing Definition: Someone simply looks over an employee’s shoulder while he or she types a password Password guessing Definition: When an employee is able to guess a person’s password after finding out personal information about him or her Dumpster diving Definition: Digging through trash to find trade secrets Whacking Definition: Using wireless hacking to break into a network Phone eavesdropping Definition: Using a digital recording device to monitor and record a fax line Discrimination Definition: Prejudices based on race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status and illegal in the United States Equal Employment Opportunity Commission Definition: federal agency that protects against workplace discrimination Age Discrimination in Employment Act Definition: Outlaws hiring practices that discriminate against people of 40 years or older, as well as those that require employees to retire before the age of 70 affirmative action programs Definition: Involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics Sexual harassment Definition: Any repeated, unwanted behavior of a sexual nature perpetrated upon one individual by another hostile work environment Definition: Three criteria must be met: the conduct was unwelcome; the conduct was severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment; and the conduct was such that a reasonable person would find it hostile or offensive dual relationship Definition: A personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities fraud Definition: Any purposeful communication that deceives, manipulates, or conceals facts in order to harm others Accounting fraud Definition: Inaccurate information in a corporation’s financial reports, in which companies provide important information on which investors and others base decisions involving millions of dollars Marketing fraud Definition: The process of dishonestly creating, distributing, promoting, and pricing products Puffery Definition: Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely on Implied falsity Definition: The message has a tendency to mislead, confuse, or deceive the public literally false Definition: When an advertising says that tests prove (establishment claims), when the advertisement cites a study or test that establishes the claim; and bald assertions (nonestablishment claims), when the advertisement makes a claim that cannot be substantiated Labeling issues Definition: Packaging, advertising, and direct sales communication that mislead consumers Consumer fraud Definition: When consumers attempt to deceive businesses for their own gain insider trading Definition: The buying or selling of stocks by insiders who possess information that is not yet public Intellectual property rights Definition: The legal protection of intellectual property such as music, books, and movies privacy issues Definition: Threats to consumer privacy, especially within the health care and Internet industries

Answer 5

c. bribery

Answer 6

d. can differ from person to person

Answer 7

d. affirmative action programs

Answer 8

b. related to lying by commission

Answer 9

d. conflict of interest

Answer 10

c. years of experience

Answer 11

d. Puffery

Answer 12

b. working more hours than reported

Answer 13

e. ethical issue

Answer 14

b. facilitation

Answer 15

e. government agency

Answer 16

c. Integrity

Answer 17

Elements of an Ethical Culture Culture < (Value, Norms, Artifacts, Behavior) < (Voluntary Actions, Governance, Core Practices, Legal compliance) Managing Ethical Risk through Mandated and Voluntary Programs • Voluntary practices: Include beliefs, values, and voluntary contractual obligations of a business. • All businesses engage in some level of commitment to voluntary activities to benefit both internal and external stakeholders. • Strategic philanthropy: Giving back to communities and causes. • Voluntary boundary: A management-initiated boundary of conduct (beliefs, values, voluntary policies, and voluntary contractual obligations). • Core practice: Helps ensure compliance with legal requirements, industry self-regulation, and societal expectations. • Mandated boundary: An externally imposed boundary of conduct (laws, rules, regulations, and other requirements). Mandated Requirements for Legal Compliance • Laws and regulations established by governments to set minimum standards for responsible behavior— society’s codification of what is right and wrong. • Civil law: Defines the rights and duties of individuals and organizations (including businesses). • Criminal law: Prohibits specific actions (fraud, theft, or securities trading violations) and imposes fines or imprisonment as punishment for breaking the law. Laws Regulating Competition Sherman Antitrust Act, 1890: Prohibits monopolies Clayton Act, 1914: Prohibits price discrimination, exclusive dealing, and other efforts to restrict competition Federal Trade Commission Act, 1914: Created the Federal Trade Commission (FTC) to help enforce antitrust laws Robinson–Patman Act, 1936: Bans price discrimination between retailers and wholesalers Wheeler–Lea Act, 1938: Prohibits unfair and deceptive acts regardless of whether competition is injured Lanham Act, 1946: Protects and regulates brand names, brand marks, trade names, and trademarks Celler–Kefauver Act, 1950: Prohibits one corporation from controlling another where the effect is to lessen competition Consumer Goods Pricing Act, 1975: Prohibits price maintenance agreements among manufacturers and resellers in interstate commerce FTC Improvement Act, 1975: Gives the FTC more power to prohibit unfair industry practices Antitrust Improvements Act, 1976: Strengthens earlier antitrust laws; gives Justice Department more investigative authority Foreign Corrupt Practices Act, 1977: Makes it illegal to pay foreign government officials to facilitate business or to use third parties such as agents and consultants to provide bribes to such officials Trademark Counterfeiting Act, 1980: Provides penalties for individuals dealing in counterfeit goods Trademark Law Revision Act, 1988: Amends the Lanham Act to allow brands not yet introduced to be protected through patent and trademark registration Federal Trademark Dilution Act, 1995: Gives trademark owners the right to protect trademarks and requires them to relinquish those that match or parallel existing trademarks Digital Millennium Copyright Act, 1998: Refines copyright laws to protect digital versions of copyrighted materials, including music and movies Controlling the Assault of NonSolicited Pornography and Marketing Act (CAN-SPAM), 2003: Bans fraudulent or deceptive unsolicited commercial email and requires senders to provide information on how recipients can opt out of receiving additional messages Fraud Enforcement and Recovery Act, 2009: Strengthens provisions to improve the criminal enforcement of fraud laws, including mortgage fraud, securities fraud, financial institutions’ fraud, commodities fraud, and fraud related to the federal assistance and relief program Dodd–Frank Wall Street Reform and Consumer Protection Act, 2010: Overhaul of the U.S. financial regulatory system Laws Protecting Consumers Federal Hazardous Substances Labeling Act, 1960: Controls the labeling of hazardous substances for household use Truth in Lending Act, 1968: Requires full disclosure of credit terms to purchasers Consumer Product Safety Act, 1972: Created the Consumer Product Safety Commission to establish safety standards and regulations for consumer products Fair Credit Billing Act, 1974: Requires accurate, up-to-date consumer credit records Consumer Goods Pricing Act, 1975: Prohibits price maintenance agreements Consumer Leasing Act, 1976: Requires accurate disclosure of leasing terms to consumers Fair Debt Collection Practices Act, 1978: Defines permissible debt collection practices Toy Safety Act, 1984: Gives the government the power to recall dangerous toys quickly Nutritional Labeling and Education Act, 1990: Prohibits exaggerated health claims and requires all processed foods to have labels showing nutritional information Telephone Consumer Protection Act, 1991: Establishes procedures for avoiding unwanted telephone solicitations Children’s Online Privacy Protection Act, 1998: Requires the FTC to formulate rules for collecting online information from children under age 13 Do Not Call Implementation Act, 2003: Directs the FCC and the FTC to coordinate so that their rules are consistent regarding telemarketing call practices including the Do Not Call Registry and other lists, as well as call abandonment Credit Card Accountability Responsibility and Disclosure Act, 2009: Implemented strict rules on credit card companies regarding topics such as issuing credit to youth, terms disclosure, interest rates, and fees Dodd–Frank Wall Street Reform and Consumer Protection Act, 2010: Promotes financial reform to increase accountability and transparency in the financial industry, protects consumers from deceptive financial practices, and establishes the Bureau of Consumer Financial Protection Reverse Mortgage Stabilization Act, 2013: Established more requirements to improve the fiscal safety and soundness of the reverse mortgage program to consumers Supervisory Privilege Parity Act, 2014: Amended the Consumer Financial Protection Act of 2010 to specify that privilege and confidentiality are maintained when information is shared by certain nondepository covered persons with federal and state financial regulators, and for other purposes E-Warranty Act, 2015: Allows manufacturers to meet warranty and labeling requirements for consumer products by displaying the terms of warranties on websites, and for other purposes Federal Cybersecurity Enhancement Act, 2015: To improve federal network security and authorize and enhance an existing intrusion detection and prevention system for civilian federal networks Consumer Review Fairness Act, 2016: Prohibits the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered in interstate commerce that were the subject of the contract, and for other purposes Laws Promoting Equity and Safety Equal Pay Act of 1963 (amended)： Prohibits sex-based discrimination in the rate of pay to men and women doing the same or similar jobs Title VII of the Civil Rights Act of 1964 (amended in 1972): Prohibits discrimination in employment on the basis of race, color, sex, religion, or national origin Occupational Safety and Health Act, 1970: Designed to ensure healthful and safe working conditions for all employees Title IX of Education Amendments of 1972: Prohibits discrimination based on sex in education programs or activities that receive federal financial assistance Pension Reform Act, 1974: Designed to prevent abuses in employee retirement, profitsharing, thrift, and savings plans Equal Credit Opportunity Act, 1974: Prohibits discrimination in credit on the basis of sex or marital status Age Discrimination Act, 1975: Prohibits discrimination on the basis of age in federally assisted programs Pregnancy Discrimination Act, 1978: Prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions Immigration Reform and Control Act, 1986: Prohibits employers from knowingly hiring a person who is an unauthorized alien Americans with Disabilities Act, 1990: Prohibits discrimination against people with disabilities and requires that they be given the same opportunities as people without disabilities Civil Rights Act, 1991: Provides monetary damages in cases of intentional employment discrimination Don’t Ask, Don’t Tell Repeal Act, 2011: Act banned discrimination on the basis of sexual orientation in the military The Sarbanes–Oxley (SOX) Act • Oversight of corporate accounting practices. • Makes fraudulent financial reporting a crime. • Strengthens fraud penalties. • Requires corporations to establish codes of ethics for financial reporting. • Must demonstrate greater transparency in financial reporting to investors and other stakeholders. • Public Company Accounting Oversight Board • Monitors/establishes standards and rules for auditors. • Has investigatory and disciplinary power over auditors and securities analysts. • Attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm’s audit committee. • Limits the length of time lead auditors can serve a particular client. * Auditor and Analyst Independence * Section 201 prohibits registered public accounting firms from providing both non-audit and audit services to a public company. * All material off-balance-sheet transactions and other relationships with unconsolidated entities that affect current or future financial conditions of a public company must be disclosed in each annual and quarterly financial report. * Public companies must report “on a rapid and current basis” material changes in their financial condition or operations. • Whistle-Blower Protection • Granted special damages and attorneys’ fees. • Cost of Compliance • Section 404 requires companies to document both the results of financial transactions and the processes they used to generate them. • Compliance costs were high shortly after Sarbanes–Oxley was passed; they have declined over the years Dodd–Frank Wall Street Reform and Consumer Protection Act • Charged with improving the quality of financial data available to government officials and creating a better system of analysis for the financial industry. • The Financial Stability Oversight Council (FSOC) • Responsible for maintaining the stability of the financial system in the U.S. through monitoring the market, identifying threats, promoting market discipline among the public, and responding to major risks that threaten stability. • The Financial Stability Oversight Council (FSOC) • Has the authority to limit or closely supervise financial risks, create stricter standards for banking and nonbanking financial institutions, and disband financial institutions that present a serious risk to market stability • Consumer Financial Protection Bureau (CFPB) • Independent agency within the Federal Reserve System that “regulate(s) the offering and provision of consumer financial products or services under the Federal consumer financial laws.” • Power over credit markets as well as authority to monitor lenders and ensure they are in compliance with the law • Consumer Financial Protection Bureau (CFPB) • Curtail unfair lending and credit card practices, enforce consumer financial laws, and check the safety of financial products before their launch into the market. • Whistle-Blower Bounty Program • Whistle-blowers are eligible to receive 10 to 30 percent of fines and settlements if their reports result in convictions of more than $1 million in penalties. Laws That Encourage Ethical Conduct 1991 Law: U.S. Sentencing Guidelines for Organizations created for federal prosecutions of organizations. These guidelines provide for just punishment, adequate deterrence, and incentives for organizations to prevent, detect, and report misconduct. Organizations need to have an effective ethics and compliance program to receive incentives in the case of misconduct. 2004 Amendments: The definition of an effective ethics program now includes the development of an ethical organizational culture. Executives and board members must assume the responsibility of identifying areas of risk, providing ethics training, creating reporting mechanisms, and designating an individual to oversee ethics programs. 2007-2008 Additional definition of a compliance and ethics program: Firms should focus on due diligence to detect and prevent misconduct and promote an organizational culture that encourages ethical conduct. More details are provided, encouraging the assessment of risk and outlining appropriate steps in designing, implementing, and modifying ethics programs and training that will include all employees, top management, and the board or governing authority. These modifications continue to reinforce the importance of an ethical culture in preventing misconduct. 2010 Amendments for reporting to the board: Chief compliance officers are directed to make their reports to their firm’s board rather than to the general counsel. Companies are encouraged to create hotlines, perform self-audit programs, and adopt controls to detect misconduct internally. More specific language has been added to the word prompt in regard to what it means to promptly report misconduct. The amendment also extends operational responsibility to all personnel within a company’s ethics and compliance program. 2014 The commission investigated how the sentencing guidelines could be used by regulatory and law enforcement agencies to recommend effective ethics and compliance programs. The commission assessed its efforts to encourage corporations, nonprofits, government agencies, and other organizations to form institutional cultures that discourage misconduct. 2015 The commission continued to emphasize the importance of the organizational culture and that there should be standards and procedures in place to prevent and detect misconduct. In addition, when there is misconduct, community service may be ordered if it is designed to remedy the misconduct. Federal Sentencing Guidelines for Organizations (FSGO) • Seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008–2009 financial crisis. • Contains 16 provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives. • FSGO Steps 1. A firm must develop and disseminate a code of conduct that communicates required standards and identifies key risk areas for the organization. 2. High-ranking personnel in the organization who are known to abide by the legal and ethical standards of the industry (ethics officer, vice president of human resources, general counsel, etc.) must have oversight over the program. 3. No one with a known propensity to engage in misconduct should be put in a position of authority. 4. A communications system for disseminating standards and procedures (ethics training) must also be put into place 5. Organizational communications should include a way for employees to report misconduct without fearing retaliation, such as an anonymous toll-free hotline or an ombudsman. Monitoring and auditing systems designed to detect misconduct are also required. 6. If misconduct is detected, the firm must take appropriate and fair disciplinary action. Individuals both directly and indirectly responsible for the offense should be disciplined. In addition, the sanctions should be appropriate for the offense. 7. After misconduct has been discovered, the organization must take steps to prevent similar offenses in the future. This usually involves making modifications to the ethical compliance program, conducting additional employee training, and issuing communications about specific types of conduct. Core or Best Practices: Voluntary Responsibilities 1. Improve quality of life and make communities the places where people want to do business, raise families, and enjoy life. Makes it easier to attract and retain employees and customers. 2. Reduce government involvement by providing assistance to stakeholders. 3. Develop employee leadership skills. 4. Create an ethical culture and values that act as a buffer to organizational misconduct. Core or Best Practices: CauseRelated Marketing • Ties an organizations product(s) directly to a social concern through a marketing program. • Affects buying patterns. • Often of short duration, so consumers may not adequately associate the business with a particular cause. Core or Best Practices: Strategic Philanthropy • Synergistic and mutually beneficial use of an organization’s core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits. • Argues that philanthropy must have a long-term positive impact. • Should pertain to the mission and operations of the company. Must also have strong support from top managers. Core or Best Practices: Social Entrepreneurship • When an entrepreneur founds an organization with the purpose of creating social value. • Can be for-profit, nonprofit, government-based, or hybrids. • Many social entrepreneurs choose to organize their enterprises as nonprofits. • The major difference between a social enterprise and a nonprofit is the use of entrepreneurial principles and business-led strategies to create social change • Companies engaged in strategic philanthropy will often outsource their philanthropic programs and/or partner with other organizations. • Directly implement their programs and are organized around achieving social objectives. Importance of Institutionalization in Business Ethics • Institutionalization helps implant values, norms, and artifacts in organizations, industries, and society. • Failure to understand core practices provides the opportunity for unethical conduct. • Institutionalization of business ethics has advanced rapidly in recent years as stakeholders recognized the need to improve business ethics.

Answer 18

Voluntary practices Definition: Include the beliefs, values, and voluntary contractual obligations of a business philanthropy Definition: Giving back to communities and causes Core practices Definition: Are documented best practices, often encouraged by legal and regulatory forces as well as industry trade associations Better Business Bureau Definition: A leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases Mandated boundaries Definition: Externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements Civil law Definition: Defines the rights and duties of individuals and organizations (including businesses) Criminal law Definition: Not only prohibits specific actions—such as fraud, theft, or securities trading violations—but also imposes fines or imprisonment as punishment for breaking the law procompetitive legislation Definition: Laws have been passed to prevent the establishment of monopolies, inequitable pricing practices, and other practices that reduce or restrict competition among businesses consumer protection law Definition: Laws that protect consumers require businesses to provide accurate information about their goods and services and follow safety standards FTC’s Bureau of Consumer Protection Definition: protects consumers against unfair, deceptive, or fraudulent practices Food and Drug Administration (FDA) Definition: federal agency of the United States Department of Health and Human Services that has stringent standards for approving drugs Occupational Safety and Health Administration Definition: Enforces safe and healthy working conditions and makes regular surprise inspections to ensure businesses maintain safe working environments Public Company Accounting Oversight Board Definition: Monitors accounting firms auditing public corporations and establishes standards and rules for auditors in accounting firms Consumer Financial Protection Bureau Definition: An independent agency within the Federal Reserve System that “regulate[s] the offering and provision of consumer financial products or services under the federal consumer financial laws Cause-related marketing Definition: Ties an organization’s product(s) directly to a social concern through a marketing program Strategic philanthropy Definition: The synergistic and mutually beneficial use of an organization’s core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits Social entrepreneurship Definition: When an entrepreneur founds an organization with the purpose of creating social value

Answer 19

a. The Occupational Safety and Health Administration

Answer 20

d. corporate accounting practices

Answer 21

a. It prohibits organizations from holding monopolies in their industries.

Answer 22

a. Criminal law

Answer 23

d. attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee

Answer 24

b. Cause-related marketing

Answer 25

b. seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008–2009 financial crisis

Answer 26

e. Common Law

Answer 27

d. voluntary responsibilities

Answer 28

c. gatekeepers

Answer 29

c. has supervisory power over credit markets as well as the authority to monitor lenders

Answer 30

e. encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs

Answer 31

e. The Office of Financial Research

Answer 32

any practice is permitted that does not substantially reduce competition and harm consumers or society. law and regulation

Answer 33

Dodd-Frank Wall Street Reform and Consumer Protection Act

Answer 34

d. | When businesspeople stretch the limits of ethical standards

Answer 35

c. | Consumer Financial Protection Bureau

Answer 36

c. | Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act

Answer 37

d. | the legal system.

Answer 38

institutionalization

Answer 39

• Moral philosophy: Specific principles or values people use to decide what is right and wrong. Guidelines for “determining how conflicts in human interests are to be settled and for optimizing mutual benefit of people living together in groups.” • Economic value orientation: Associated with values quantified by monetary means. If an act produces more economic value for its effort, then it should be accepted as ethical. • Idealism: Efforts required to account for all objects in nature and experience and to assign them a higher order of existence. • Realism: An external world exists independent of our perceptions. It assumes humankind is not naturally benevolent and kind, but instead inherently self-centered and competitive. • Relativist perspective: Evaluates ethicalness subjectively on the basis of individual and group experiences. • Descriptive relativism: Relates to observations of other cultures. Different cultures exhibit different norms, customs, and values, but these observations say nothing about the higher questions of ethical justification. • Meta-ethical relativism: People naturally see situations from their own perspectives, meaning there is no objective way of resolving ethical disputes between different value systems and individuals. • Normative relativism: Assumes one person’s opinion is as good as another’s. Moral Philosophies and Terms • Monists: Believe only one thing is intrinsically good. • Hedonism: The idea that pleasure is the ultimate good, or the best moral end involves the greatest balance of pleasure over pain. Hedonism defines right or acceptable behavior as that which maximizes personal pleasure. • Quantitative hedonists: More pleasure is better. • Qualitative hedonists: It is possible to get too much of a good thing (such as pleasure). • Pluralists: Believe two or more things are intrinsically good. • Plato: The good life is a mixture of moderation and fitness, proportion and beauty, intelligence and wisdom, sciences and arts, and pure pleasures of the soul. • Instrumentalists: Reject the ends/means argument and argue ends, purposes, or outcomes are intrinsically good in and of themselves (John Dewey: Almost any action can be an end or a mean). • Goodness theories: Focus on the end result of actions and the goodness or happiness created by them. • Obligation theories: Emphasize the means and motives by which actions are justified (Teleology and Deontology). Obligation Theories: Teleology • Teleology: Acts are morally right or acceptable if they produce some desired result, such as realization of self-interest or utility. • Egoism: Defines right or acceptable actions as those that maximize a particular person’s selfinterest as defined by the individual. • Enlightened egoism: Take a long-range perspective and allow for the well-being of others although their own self-interest remains paramount. • Teleology • Utilitarianism: Defines right or acceptable actions as those that maximize total utility, or the greatest good for the greatest number of people. • Rule utilitarianism: Determines behavior on the basis of principles or rules designed to promote the greatest utility, rather than on individual examinations of each situation they encounter. • Act utilitarianism: Examine specific actions, rather than the general rules governing them, to assess whether they will result in the greatest utility. Obligation Theories: Deontology • Deontology: Focuses on the preservation of individual rights and on the intentions associated with a particular behavior rather than on its consequences. • Regard certain behaviors as inherently right as defined by self or extraterrestrial. • Nonconsequentialism: A system of ethics based on respect for persons. (Another reference for deontology.) • Categorical imperative: “Act as if the maxim of thy action were to become by thy will a universal law of nature.” • Rule deontologists: Believe conformity to general moral principles based on logic determines ethicalness. • Act deontologists: Actions are the proper basis to judge morality or ethicalness and requires a person use equity, fairness, and impartiality when making and enforcing decisions. Virtue Ethics • Virtue ethics: What is moral in a given situation is not only what conventional morality requires but what a person with a “good” moral character deems appropriate. • Virtue ethics approach to business: 1. Good corporate ethics programs encourage individual virtue and integrity. 2. By the employee’s role in the community (organization), these virtues form a good person. 3. An individual’s ultimate purpose is to serve society’s demands and the public good and be rewarded in his or her career. 4. The well-being of the community goes hand in hand with individual excellence. Justice Theories • Justice: Fair treatment and due reward in accordance with ethical or legal standards, including the disposition to deal with perceived injustices of others. • Based on the perceived rights of individuals and on the intentions of the people involved in a business interaction. • Evaluates ethicalness on the basis of fairness. Types of Justice Justice Type Distributive justice: Based on the evaluation of outcomes or results of the business relationship Areas of Emphasis Benefits derived Equity in rewards Justice Type Procedural justice: Based on the processes and activities that produce the outcome or results Areas of Emphasis Decision making process Level of access, openness, and participation Justice Type Interactional justice: Based on relationships and the treatment of others Areas of Emphasis Accuracy of information Truthfulness, respect, and courtesy in the process Cognitive Moral Development and Limitations • Stage 1: Punishment and obedience: Right and wrong are not connected with any higher order or philosophy but rather with a person who has power. • Stage 2: Individual instrumental purpose and exchange: Right is what serves his or her own needs. Individuals evaluate behavior on the basis of its fairness to them. • Stage 3: Mutual interpersonal expectations, relationships, and conformity: Emphasize the interests of others rather than simply those of themselves, although ethical motivation is still derived from obedience to rules. • Stage 4: Social system and conscience maintenance: Determine what is right by considering their duty to society, not just to certain other people. Duty, respect for authority, and the maintenance of the social order become the focal points at this stage • Stage 5: Prior rights, social contract, or utility: Individuals are concerned with upholding the basic rights, values, and legal contracts of society. Individuals feel a sense of obligation or commitment to other groups and recognize that in some cases legal and moral points of view may conflict. • Stage 6: Universal ethical principles: Right is determined by universal ethical principles everyone should follow. People have certain inalienable rights that are universal in nature and consequence. These rights, laws, or social agreements are valid not because of a particular society’s laws or customs, but because they rest on the premise of universality White-Collar Crime (WCC) • Does more damage in monetary and emotional loss in one year than violent crimes do over several years combined. • Tend to be highly educated, in positions of power, trust, respectability, and responsibility. • The corporate culture can transcend the individuals beliefs. • With time, patterns become institutionalized sometimes encouraging unethical behaviors. • The views and behaviors of an individual’s acquaintances within an organization can affect crime. • For companies with a high number of ethical or unethical employees, people who are undecided about their behavior (about 40 percent of businesspeople) are more likely go along with their coworkers. • Some businesspeople may have inherently criminal personalities. Corporate psychopaths, or managers who are nonviolent, selfish, and remorseless, exist in many large corporations. Common Justifications for White-Collar Crime 1. Denial of responsibility. (Everyone can, with varying degrees of plausibility, point the finger at someone else.) 2. Denial of injury. (White-collar criminals often never meet or interact with those who are harmed by their actions.) 3. Denial of the victim. (The offender is playing tit-for-tat and claims to be responding to a prior offense inflicted by the supposed victim.) 4. Condemnation of the condemners. (Executives dispute the legitimacy of the laws under which they are charged, or impugn the motives of the prosecutors who enforce them.) 5. Appeal to a higher authority. (“l did it for my family” remains a popular excuse.) 6. Everyone else is doing it. (Because of the highly competitive marketplace, certain pressures exist to perform that may drive people to break the law.) 7. Entitlement. (Criminals simply deny the authority of the laws they have broken.)

Answer 40

Moral philosophy Definition: Refers to the specific principles or values people use to decide what is right and wrong economic value orientation Definition: Associated with values quantified by monetary means; according to this theory, if an act produces more economic value for its effort, then it should be accepted as ethical Idealism Definition: A moral philosophy that places special value on ideas and ideals as products of the mind Realism Definition: The view that an external world exists independent of our perceptions Monists Definition: Believe only one thing is intrinsically good hedonism Definition: The idea that pleasure is the ultimate good, or the best moral end involves the greatest balance of pleasure over pain quantitative hedonists Definition: Those who believe more pleasure is better qualitative hedonists Definition: Those who believe it is possible to get too much of a good thing Pluralists Definition: Often referred to as nonhedonists, take the opposite position that no one thing is intrinsically good instrumentalists Definition: Reject the ideas that (1) ends can be separated from the means that produce them and (2) ends, purposes, or outcomes are intrinsically good in and of themselves Goodness theories Definition: Focus on the end result of actions and the goodness or happiness created by them Obligation theories Definition: Emphasize the means and motives by which actions are justified, and are divided into the categories of teleology and deontology Teleology Definition: Refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result, such as pleasure, knowledge, career growth, the realization of self-interest, utility, wealth, or even fame consequentialism Definition: Teleological philosophies that assess the moral worth of a behavior by looking at its consequences Egoism Definition: Defines right or acceptable behavior in terms of its consequences for the individual enlightened egoism Definition: A long-range perspective and allows for the well-being of others although their own self-interest remains paramount utilitarianism Definition: Seeks the greatest good for the greatest number of people rule utilitarians Definition: Argue that general rules should be followed to decide which action is best act utilitarians Definition: The rightness of each individual action must be evaluated to determine whether it produces the greatest utility for the greatest number of people Deontology Definition: Refers to moral philosophies that focus on the rights of individuals and the intentions associated with a particular behavior rather than its consequences nonconsequentialism Definition: Regard for certain behaviors as inherently right, and the determination of this rightness focuses on the individual actor, not on society categorical imperative Definition: If you feel comfortable allowing everyone in the world to see you commit an act and if your rationale for acting in a particular manner is suitable to become a universal principle guiding behavior, then committing that act is ethical Rule deontologists Definition: Conformity to general moral principles based on logic determines ethicalness Act deontologists Definition: Hold that actions are the proper basis to judge morality or ethicalness relativist perspective Definition: Definitions of ethical behavior are derived subjectively from the experiences of individuals and groups Descriptive relativism Definition: Relates to observations of other cultures Meta-ethical relativism Definition: Proposes that people naturally see situations from their own perspectives, and there is no objective way of resolving ethical disputes between different value systems and individuals normative relativism Definition: The assumption that one person’s opinion is as good as another’s Virtue ethics Definition: Argues that ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person with a “good” moral character would deem appropriate in a given situation Justice Definition: Fair treatment and due reward in accordance with ethical or legal standards, including the disposition to deal with perceived injustices of others Distributive justice Definition: Based on the evaluation of the outcomes or results of a business relationship Procedural justice Definition: Considers the processes and activities that produce a particular outcome Interactional justice Definition: Based on the relationships between organizational members, including the way employees and management treat one another Kohlberg’s model of cognitive moral development (CMD) Definition: Theory in which people make different decisions in similar ethical situations because they are in different moral development stages white-collar crime (WCC) Definition: Crimes perpetrated every year by nonviolent business criminals

Answer 41

b. relativism

Answer 42

a. virtue ethic

Answer 43

d. interactional

Answer 44

d. deontology

Answer 45

a. utilitarianism

Answer 46

e. a white-collar crime

Answer 47

a. The stage of universal ethical principles

Answer 48

a. Kant's Categorical Imperative

Answer 49

e. an act is morally right or acceptable if it produces a desired result

Answer 50

b. teleology, deontology, relativist perspective, virtue ethics, and justice

Answer 51

d. they are in different stages of cognitive moral development

Answer 52

e. A moral virtue represents an acquired disposition that is valued as a part of an individual's character.

Answer 53

c. | Egoism

Answer 54

a. | virtue

Answer 55

d. | deontologist

Answer 56

e. | Deontology

Answer 57

e. | the rules or assumptions that people use to decide what is right and wrong.

Answer 58

e. focuses on an individual's self-interest but takes others’ well-being into account. 不知关注他人，还会关注自己的利益

Answer 59

b. | categorical imperative

Answer 60

True the moral instructions of the world's great religions are often general and imprecise.

Answer 61

c. | that it highlights people’s differences, not similarities.

Answer 62

QUESTION 1 _____ think that not just one thing is intrinsically good. a. Deontologists SL b. Pluralists c. Hedonists d. Teleologists e. Relativists 1 points QUESTION 2 In Kohlberg's stages of cognitive moral development, what is the last stage? a. Individual instrumental purpose and exchange b. Need achievement c. Social system and conscience maintenance SL d. Universal ethical principles e. Punishment and obedience 1 points QUESTION 3 _____ are considered to have lower ethical issue awareness, suggesting they could have difficulty identifying ethical issues. They may be more dedicated to completing projects as well as focused on their group's goals and values. a. Hedonists SL b. Relativists c. Teleologists d. Pragmatists e. Deontologists 1 points QUESTION 4 All of the following examples are considered white collar crime except for ____________ a. Corporate tax evasion SL b. Mugging someone c. Identity theft d. Insider trading e. Credit card fraud 1 points QUESTION 5 _____ addresses the issue of what people think they can expect based on their rights and performance in the workplace, and therefore is more likely to be based on deontological moral philosophies than on teleological or utilitarian ones. a. Relativism SL b. Justice c. Egoism d. Rights e. Virtue ethics 1 points QUESTION 6 As time passes, an action or behavior may come to be seen as unethical according to this philosophy. SL a. The relativist perspective 人们会改变他们思想，viewpoint is from person to person b. Deontology c. Rule deontology d. Egoism e. Teleology 1 points QUESTION 7 In Kohlberg’s model, the stage of mutual interpersonal expectations, relationships, and conformity (stage 3) differs from the stage of individual instrumental purpose and exchange (stage 2) in terms of the individual’s motives in a. maintaining obedience to authority. b. upholding the basic values of society. c. maintaining the social order. d. considering duty to society. SL e. considering fairness to others. 1 points QUESTION 8 Kohlberg's stages of development includes the stage classifying an individual who describes right and wrong based on legal contracts. This is called ______________ a. Punishment and obedience (stage ) b. Universal ethical principles (stage 6) SL c. Prior rights, social contract, or utility (stage 5) d. Mutual interpersonal expectations, relationships, and conformity (stage 3) e. Social system and conscience maintenance (stage 4) 1 points QUESTION 9 As a person lives more life and moves through various life stages, Kohlberg's model of development suggests __________________ SL a. may change his/her cognitive moral development and behavior. b. will experience less opportunity to behave unethically. c. is unlikely to change his/her values and ethical behavior. d. will likely be promoted. e. will depend more on the input of significant others in ethical decision making. 1 points QUESTION 10 Interactional justice addresses the actions that result in a particular outcome. True SL False 未选择题库 With Kohlberg's CMD (cognitive moral development) model, the six stages can be categorized into three levels of ethical concerns. When an indidual is at the 2nd level ______________ a. see beyond the norms, laws, and authority of groups or individuals. SL b. define right as that which conforms to the expectations of good behavior of the larger society. c. are concerned with their long-term interests and with internal rewards and punishments. d. are unethical. e. are concerned with their immediate interests and with external rewards and punishments. ``` _____ says behavior defined as ethical includes not only acting within accepted moral standards but also taking into account what an individual with sound moral characteristics might do in a situation. a. Reciprocity b. Rule deontology SL c. Virtue ethics d. Hedonism e. Act utilitarianism ``` Kohlberg's theory of CMD (cognitive moaral development) is considered by some to be problematic because ________________ SL a. The original theory was transferred from children to adults. b. All of the moral philosophies are regarded as equal to one another. c. It can only apply to those with a deontological perspective. d. The theory has little reliability or validity. e. It assumes that very few adults ever reach stage 6.

Answer 63

A Framework for Ethical Decision Making in Business • Ethical awareness: The ability to perceive whether a situation or decision has an ethical dimension. • Ethical issue intensity: The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization. • Personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressures prevailing at a particular place and time. • Moral intensity: Individuals’ perceptions of social pressure and the harm they believe their decisions will have on others. Framework for Understanding Ethical Decision Making in Business Ethical issue intensity + individual factors + organizational factors + opportunity = business ethical evolution and intentions ----> ethical or unethical behavior individual factors • Gender: In many aspects there are no differences between men and women with regard to ethical decision making. • Education: Those more familiarized with the ethical decision making process due to education or experience are likely to spend more time examining and selecting different alternatives to an ethics issue. • Nationality: Impossible to state that ethical decision making in an organizational context will differ significantly among individuals of different nationalities. • Age: Older employees with more experience have greater knowledge to deal with complex industry-specific ethical issues. Younger managers are far more influenced by organizational culture. • Locus of control: How people view themselves in relation to power. • External control: Going with the flow. Life events are due to uncontrollable forces. • Internal control: They control the events in their lives by their own effort and skill. Organizational Factors • Conditions in an organization that limit or permit ethical or unethical behavior. • Results from conditions that either provide rewards, whether internal or external, or fail to erect barriers against unethical behavior. • Internal rewards: Feelings of goodness and personal worth generated by performing altruistic or ethical acts. • External rewards: What an individual expects to receive from others in the social environment in terms of overt social approval, status, and esteem. • Individual immediate job context: Where an individual works, whom they work with, and the nature of the work. Business Ethics Intentions, Behavior, and Evaluations • Ethical business issues and dilemmas involve problem-solving situations where the rules governing decisions are often vague or in conflict. • Not always immediately clear whether the decision was ethical. • No magic formulas that ethical business issues or dilemmas can be plugged into to get a solution • Even if they mean well, most businesspeople make ethical mistakes. • No substitute for critical thinking and the ability to take responsibility for our own decisions. • Guilt or uneasiness is the first sign an unethical decision may have occurred. • Change the behavior to reduce such feelings. • This change can reflect a person’s values or morals shifting to fit the decision or the person changing his or her decision type the next time a similar situation occurs. • The road to success depends on how the businessperson defines success. Using the Ethical Decision Making Model to Improve Ethical Decisions • Ethical decision making model does not help in determining if a business decision is right or wrong. • Provides insights about ethical decision making in businesses. • Business ethics involves value judgments and collective agreement about acceptable patterns of behavior. • Gaining an understanding of the factors that make up ethical decisions helps in differentiating between an ethical issue and a dilemma Normative Considerations in Ethical Decision Making • How organizational decision makers should approach an issue. • Different from a descriptive approach that examines how organizational decision makers approach ethical decision making. • A normative approach in business ethics revolves around the standards of behavior within the firm as well as within the industry. • Normative rules and standards are based on individual moral values as well as the collective values of the organization. • The normative approach for business ethics is concerned with general ethical values implemented into business. • Concepts like fairness and justice are highly important in a normative structure. • Strong normative structures in organizations are positively related to ethical decision making. Institutions as the Foundation for Normative Values • Government, religion, and education influence creation of values, norms, and conventions. • Industry competition determined by: 1. Barriers to entry into the industry. 2. Available substitutes for the products produced by the industry rivals. 3. The power of the industry rivals over their customers. 4. The power of the industry rivals’ suppliers over other rivals. Implementing Principles and Core Values in Ethical Decision Making • John Rawls: Believed justice principles were beliefs that everyone could accept. • Veil of ignorance by Rawls: Examined how individuals would formulate principles if they were uncertain about their future position in society. • Principles of justice by Rawls • Liberty principle (equality principle): Each person has basic rights that are compatible to the basic liberties of others. • Difference principle: Economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society. • Companies convert basic principles into core values. • Provide the abstract ideals that are distinct from individual values and daily operational procedures. • Include operating in a sustainable manner, collaboration and teamwork, and avoiding bribery. • Provide a blueprint into the firm’s goals and how it views ethical decision making. Principles and Values page 21 Understanding Ethical Decision Making • Top level support for ethical behavior is instrumental in helping employees engage in their personal approaches to ethical decision making. • Normative perspectives set forth ideal goals to which organizations should aspire. • Knowledge about ethical decision making helps in making good decisions.

Answer 64

Ethical awareness Definition: The ability to perceive whether a situation or decision has an ethical dimension Ethical issue intensity Definition: The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization Moral intensity Definition: To individuals’ perceptions of social pressure and the harm they believe their decisions will have on others gender Definition: In ethical decision making, research shows that in many aspects there are no differences between men and women Education Definition: A significant factor in the ethical decision-making process; generally, the more education or work experience people have, the better they are at making ethical decisions Nationality Definition: The legal relationship between a person and the country in which he or she is born Age Definition: An individual factor that has a complex relationship with business ethics Locus of control Definition: To individual differences in relation to a generalized belief about how you are affected by internal versus external events or reinforcements external control Definition: Those who see themselves as going with the flow because that is all they can do internal control Definition: Those believe they control the events in their lives by their own effort and skill, viewing themselves as masters of their destinies and trusting in their capacity to influence their environment Corporate culture Definition: A set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share ethical culture Definition: Reflects the integrity of decisions made and is a function of many factors, including corporate policies, top management’s leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior significant others Definition: Those who have influence in a work group, including peers, managers, coworkers, and subordinates Obedience to authority Definition: A reason employees resolve business ethics issues by simply following the directives of a superior Opportunity Definition: The conditions in an organization that limit or permit ethical or unethical behavior immediate job context Definition: Where they work, whom they work with, and the nature of the work normative approaches Definition: How organizational decision makers should approach an issue instrumental concern Definition: focuses on positive outcomes, including firm profitability and benefits to society institutional theory Definition: theory that organizations operate according to taken-for-granted institutional norms and rules veil of ignorance Definition: a thought experiment that examined how individuals would formulate principles if they did not know what their future position in society would be equality principle Definition: states that each person has basic rights that are compatible to the basic liberties of others difference principle Definition: states that economic and social equalities or inequalities should be arranged to provide the most benefit to the least-advantaged members of society

Answer 65

``` Individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements is known as ______. a. morality beliefs b. internal control c. external control d. moral intensity SL e. locus of control ``` ``` The ability to perceive whether a situation or decision has an ethical dimension is defined as ______. a. business issue awareness b. ethical issue intensity c. moral issue intensity SL d. ethical awareness e. moral awareness ``` ``` Elena, an employee at ABC Marketing, has observed misconduct at work and wonders if she should report it. In the end, she decides not to do so because of the possible repercussions at work. Which of the following has determined the Elena's action? a. corporate culture b. opportunity SL c. organization factors d. individual factors e. control issues ``` Which statement best describes ethical issue intensity? a. The perceived value of an ethical issue to the society. SL b. The perceived relevance or importance of an ethical issue to the individual, work group, and/or organization c. The perceived importance of an ethical issue to the government. d. The perceived relevance or importance of an ethical issue to the local community. e. A set of values, beliefs, goals, norms, and ways to solve problems that members of an organization share. Which of the following statements best describes an opportunity? a. organizational factors SL b. the conditions in an organization that limit or permit ethical or unethical behavior c. a reflection of whether the firm has an ethical conscience d. how easy it is to pilfer office supplies from one's workplace e. a corporate culture Those who have influence in a work group, including peers, managers, coworkers, and subordinates, are referred to as significant others. Which of the following is supported by research concerning significant others? a. Significant others within an organization may have less of an impact on a worker's decisions than gender. b. Significant others within an organization have little impact on a worker's decisions. c. Significant others within an organization have no impact on a worker's decisions. d. Significant others within an organization have more impact on a worker's decisions on a daily basis than any other factor. SL e. Significant others within an organization may have more impact on a worker's decisions on a daily basis than any other factor. ``` Ethical ______ is the ability to perceive whether a situation or decision has an ethical dimension. a. personality b. education c. morality d. intensity SL e. awareness ``` ``` According to researchers, normative values largely originate from all of the following EXCEPT ______. a. family b. religion c. friends SL d. the media e. government ``` A corporate culture can be defined as ______. a. a set of rules that some employees agree to obey b. the perceived importance of an ethical issue to the government SL c. a set of values, beliefs, goals, norms, and ways to solve problems that employees of an organization share d. the working environment in the executive suite e. the interpersonal relationships in the organization ``` Which of the following is NOT a factor in the ethical decision-making model? a. organizational factors SL b. employee benefits packages c. opportunity d. ethical issue intensity e. individual factors ``` Rawls used what he called the veil of ignorance which led him to develop ______. a. the difference principle which states that each person has basic rights that are compatible to the basic liberties of others b. five main principles of justice c. the equality principle in that economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society SL d. the difference principle in that economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society e. the Constitution principle ``` The relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization is known as ______. a. moral intensity b. locus of control c. obedience to authority d. opportunity SL e. ethical issue intensity ``` ``` _____ involves the conditions for encouraging or limiting ethical behavior in an organization through rewards for ethical behavior or failing to prohibit unethical behavior. a. Punishment b. Regulation c. Locus of Control d. Governance SL e. Opportunity ``` The opportunities that employees have for unethical behavior in an organization can be nearly eliminated through formal codes, policies, and rules that are adequately enforced by management. SL a. True b. False Applying a personal moral philosophy is the first step in the ethical decision-making process. a. True SL b. False

Answer 66

When ethical instructions are given by a higher up, the choice to follow those instructions is called a. moral intensity. b. gender. SL c. obedience to authority. d. ethical issue intensity. e. an internal locus of control. Management and business studies related to nationality and the practice of making ethical decisions a. suggests that corporations pay a lot of attention to such research. b. suggests that the influence of nationality on corporate culture is growing. c. suggests that organizations should be very concerned about an employee's nationality. d. shows no relationship between the two. SL e. is hard to interpret in a business context because of cultural differences. An ethical organizational culture requires_____ and _____ to establish an ethics program and monitor the complex ethical decisions being made by employees. SL a. shared values; proper oversight b. ethical issue intensity; ethics training c. individual ethics; ethical issue intensity d. employee evaluations; good intentions e. organizational factors; individual factors For employees and individuals who start the shift in values that ends with making unethical decisions, there are many common justifications used to reduce feelings of guilt. Chose the option below that would NOT eliminate guilt. a. Those around me are doing it so why shouldn't I? b. If I don't do this, I might not be able to get a good reference from my boss when I leave. c. If I don't do this, I might never be promoted. d. I need a paycheck and can't afford to quit right now. SL e. This is in keeping with my personal morals and the code of conduct, so it is okay. In the workplace, individuals who think their actions influence their life's circumstances have a(n) a. external locus of control. SL b. internal locus of control. c. moral intensity d. obedience to authority e. opportunity Within a company itself, the values of the workplace can have a greater degree of importance on a decision than an individual's own set of morals and values. SL True False As Chapter Five explains, there are many factors that influence an individual's behavior. Despite intentions to act a certain way and do the right thing, ____________ can affect a person's intent. a. the desire for financial gain b. familial expectations c. religious beliefs d. cognitive dissonance SL e. organizational or social forces Much research is conducted on topics related to locus of control. One such study discovered that people displaying characteristics of external control had improved ethical decision making, compared to those with internal control True SL False There may be a greater probability that organizations will cut corners when margins are low. This can happen because of high levels of ___________________. 错的 a. Cooperation b. Profit SL c. Loss d. Competition e. Return When a company's program of ethics is based on _______________, the program leads to greater successes than others focused strictly on following laws or federal compliance initiatives. 错的 SL a. principles b. customer c. values d. political e. social