Chapter 5 Business Law

Front 1

-The study of what constitutes right and wrong behavior.
-Focuses on morality and the application of moral principles in everyday life.

Back 1

Ethics

Front 2

focuses on what is right and wrong behavior in the business world

Back 2

Business Ethics

Front 3

The legal role of the corporation

Back 3

-to make money
-to return profits to shareholders and owners

Front 4

The ethical role of the corporation

Back 4

-to return profits and treat everyone well within the company

Front 5

Why is business ethics important?

Back 5

-An understanding of business ethics is important:
*to the long-run viability of a business
*the well being of its officers and directors
*welfare of its employees

Front 6

-the minimum acceptable standard for ethical business behavior
-normally considered to be compliance with the law

Back 6

moral minimum

Front 7

The law does not and cannot codify all _____________ ____________.

Back 7

Ethical Requirements

Front 8

Standards in a a)___________ __________ or b) _________ __ ______ must guide decisions.

Back 8

a) Company's Policies
b) Code of Ethics

Front 9

Ethical leadership starts:

Back 9

at top management.

Front 10

-the process by which an individual examines a situation according to his or her moral convictions or ethical standards.

Back 10

Ethical Reasoning

Front 11

Approaches to Ethical Reasoning:

Back 11

A) Duty-Based Ethics
B) Outcome-based Ethics
C) Corporate Social Responsibility

Front 12

Duty-Based Ethics

Back 12

1)Religious Ethical Standards
2) Kantian Ethics
3) The Principle of Rights

Front 13

-provide that when an act is prohibited by religious teachings, it is unethical and should not be undertaken, regardless of the consequences.
-also involves compassion

Back 13

Religious Standards

Front 14

-Immanual Kant believed that people should be respected because they are qualitatively different from other physical objects.
-His categorical imperative is that individuals should evaluate their actions in light of what would happen if everyone acted in the same way.

Back 14

Kantian Ethics

Front 15

-a key factor in determining whether a business decision is ethical is how that decision
affects the rights of others,
including employees, customers, and society.
-"according to the principle that persons have rights.."

Back 15

The Principle of Rights

Front 16

-is a belief that an action is ethical if it produces the greatest good for the greatest number.
-This approach is often criticized, because it tends to reduce the welfare of people to plus and minus signs on a cost-benefit worksheet.

Back 16

Utilitarianism

Front 17

Applying the utilitarian theory this requires:

Back 17

1)a determination of which individuals will be affected by the action in question
2) a cost-benefit analysis
3) a choice among alternative actions that will produce maximum societal utility

Front 18

-involves an assessment of the negative and positive effects of alternative actions on individuals

Back 18

cost-benefit analysis

Front 19

Corporate Social Responsibility

Back 19

1) Stakeholder Approach
2) Corporate Citizenship
3)A Way of Doing Business
4)Employee Recruiting and Retention

Front 20

-under this approach, a firms duty to its shareholders should be weighted against duties to others (employees, etc.) who may have a greater stake in a particular decision.

Back 20

Stakeholder Approach

Front 21

-this theory argues that business firms should pursue goals that society deems important, because firms have so much wealth and power.
-Some companies publish annual corporate social responsibility or sustainability reports to highlight their activities

Back 21

Corporate Citizenship

Front 22

-some argue that corporate promotion of social goals should be pursued as a "______ ___ _______ _________" rather than as a special program.
-some suggest that such activities should be relevant and significant to a firm's stakeholders

Back 22

A Way of Doing Business

Front 23

-a focus on corporate social responsibility can help a firm retain its employees, especially altruistic younger workers

Back 23

Employee Recruiting and Retention

Front 24

How to create a better ethical environment:

Back 24

1)The law
2)Business rules and procedures
3) Social Values
4) An Individual's Conscience
5) Promises to Others
6) Heroes

Front 25

The Law

Back 25

Is the proposed action legal?

Front 26

Business rules and procedures

Back 26

Is the proposed action consistent with company policies and procedures?

Front 27

Social Values

Back 27

Is the proposed action with the "spirit" of the law, even if it is not expressly prohibited?

Front 28

An Individual's Conscience

Back 28

How does the actor's or decision maker's conscience regard the plan of action? Could the plan survive in the flare of publicity?

Front 29

Promises to others

Back 29

Will the action satisfy commitments that have been made to others, inside and outside the corporation?

Front 30

Heroes

Back 30

How would the actor's or decision maker's hero regard the action?

Front 31

Practical Solutions to Corporate Ethics Questions:

Back 31

1) Inquiry
2) Discussion
3) Decision
4) Justification

Front 32

Inquiry includes:

Back 32

Who are the parties, what is the problem, and what are the relevant ethical principles?

Front 33

Discussion includes:

Back 33

What are the options for action? What are the goals to be attained?

Front 34

Decision includes:

Back 34

Can a consensus be reached on the options for action? If so, what is the plan?

Front 35

Justification includes:

Back 35

What are the reasons for the proposed actions? Will the corporate stakeholders accept those reasons?

Front 36

Evaluation includes:

Back 36

Will the solution satisfy corporate, community, and individual values?

Front 37

FCPA

Back 37

Foreign Corrupt Practices Act

Front 38

-Monitoring of employment practices of foreign suppliers
-The Foreign Corrupt Practices Act

Back 38

Business Ethics on a Global Level

Front 39

The Foreign Corrupt Practices Act consists of:

Back 39

1) Prohibition against the Bribery of Foreign Officials
2) Accounting requirements
3) Penalties

Front 40

-prohibits U.S. business persons from bribing foreign officials to secure favorable contracts

Back 40

Foreign Corrupt Practices Act

Front 41

Under the Foreign Corrupt Practices Act, accounting requirements will include:

Back 41

accountants may be subject to penalties for making false statements business records or accounts.

Front 42

Under the Foreign Corrupt Practices Act, penalties are as follows:

Back 42

-Firms: Up to 2 million
-Individuals: Up to $100K (Cannot be paid by the company.)
-Imprisonment up to five years