Week 9 Flashcards
(16 cards)
What is business ethics management?
Efforts by businesses to manage ethical issues using policies, training, and programs.
Why do companies manage ethics?
To avoid scandals, reduce risk, protect reputation, and do the right thing.
Common tools of business ethics management?
Mission/values statements
Codes of ethics
Ethics training
Reporting channels
Risk management
Ethics officers/consultants
What is a code of ethics?
A voluntary guide stating the values and ethical standards expected from employees or professionals.
Types of codes of ethics?
Organizational – For one company
Professional – For a profession (e.g. doctors, accountants)
Industry – For entire industries (e.g. finance, electronics)
Program – For participants in ethical initiatives (e.g. Fairtrade)
What makes a code of ethics effective?
Clear, specific, and realistic
Supported by training
Enforced and monitored
Backed by leadership
What’s the ethical absolutism view?
There are universal moral principles that apply everywhere.
What’s the ethical relativism view?
Morality depends on culture and context; no universal right or wrong.
What’s the middle ground (Donaldson, Crane & Matten)?
Respect core human values while allowing flexibility for local traditions.
What is stakeholder theory?
The idea that businesses must consider the interests of all stakeholders—not just shareholders.
Three types of stakeholder theory?
Normative – Corporations should respect stakeholder interests.
Instrumental – Doing so is beneficial for the company.
Descriptive – Shows how companies actually treat stakeholders.
What is Stakeholder Salience (Mitchell et al., 1997)?
Stakeholders are prioritized based on:
Power (influence)
Legitimacy (rightful involvement)
Urgency (time-sensitive concerns)
Stakeholder Salience levels?
Latent (low salience): One attribute
Expectant (moderate salience): Two attributes
Definitive (high salience): All three attributes
What is social accounting?
Measuring and reporting a company’s ethical, social, and environmental impacts.
Why do companies do social accounting?
Meet internal/external pressure
Improve stakeholder trust
Manage risks
Promote transparency
What makes social accounting effective (Zadek et al., 1997)?
Inclusivity: Stakeholders’ views matter
Comparability: Compare with other firms
Completeness: Cover all activities
Continuous improvement and verification
