Chapters 1, 2, 3

Front 1

Business Ethics

Back 1

Organizational principles, values, and norms that may originate from individuals, organizational statements, or film the legal system that primarily guide individual and group behavior in business.

Front 2

Morals

Back 2

A person's personal philosophies about what is right our wrong

Front 3

Principles (examples)

Back 3

Specific and persuasive boundaries for behavior that should not be violated. Become the basis for rules. Human rights, freedom of speech, and fundamentals of justice.

Front 4

Values

Back 4

Ensuring beliefs and ideals that are socially enforced. Business values= teamwork, trust, and integrity.

Front 5

Consumer's Bill of Rights

Back 5

1962 by John F. Kennedy. Outlined basic consumer rights:
1. The right to safety
2. The right to be informed
3. The right to choose
4. The right to be heard

Front 6

Corporate social responsibility

Back 6

An organization's obligation to maximize its positive impact on stakeholders and minimize its negative impact. Issues in 4 categories:

1. Social issues

2. Consumer protection

3. Sustainability

4. Corporate governance

Front 7

Defense Industry Initiative on Business Ethics and Conduct (DII)

Back 7

1980's. Developed to guide corporate support for ethical conduct.
1. Supports codes of conduct and their widespread distribution.
2. Companies are to provide ethics training for employees as well as continuous support between training periods
3. Defense contractors must create an open atmosphere in which employees feel comfortablereporting violations without fear of retribution.
4. Companies need to perform extensive internal audits and develop effective internal reporting and voluntary disclosure paths.
5. Companies preserve the integrity of the defense industry
6. Companies must adopt a philosophy of public accountability.

Front 8

Federal Sentencing Guidelines for Organizations (FSGO)

Back 8

November 1991. Set tone for organizational ethical compliance programs in the 90's. Based on six principles of the DII, rewarded organizations for preventing misconduct.

Front 9

Sarbanes-Oxley Act

Back 9

Passed in 2002. Made securities fraud a criminal offense and stiffened penalties for corporate fraud. Created an accounting oversight board that requires corporations to establish codes of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interested parties. Requires top executives to sign off on their firm's financial reports, and risk fines and prison sentences. Requires executives to disclose stock sales immediatelyand prohibits companies from giving loans to top managers.

Front 10

Dodd-Frank Wall Street Reform and Consumer Protection Act

Back 10

Addressed some of the issues related to the financial crisis and recession. Designed to make the financial services industry more ethical and responsible. Requires regulators to create hundreds of rules to promote financial stability, improve accountability and transparency, and protect consumers from abusive financial practices.

Front 11

Ethical culture

Back 11

Acceptable behavior as defined by the company and industry. Component of corporate culture that captures the values and norms an organization derives and is compared to by its industry as appropriate conduct. The goal is to minimize the need for enforced compliance of rules and maximize the use of principlesthat contribute to ethical reasoning in difficult our new situations. Positively related to workplace presence of ethics hotlines. Many businesses have ethics officers. Ethical culture creates shared values and support for ethical decisions and is driven by top management.

Front 12

Stakeholders

Back 12

Customers, investors, and shareholders, employees, suppliers, government agencies, communities, and many others who have "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes

Front 13

Primary stakeholders

Back 13

Those whose continued association is absolutely necessary for a firm's survival. Ex. Employees, customers, investors, and shareholders, as well as governments and communities that provide necessary infrastructure.

Front 14

Secondary stakeholders

Back 14

Do not typically engage in transactions with a company and are therefore not essential to its survival. Ex. media, trade associations, and special interest groups (AARP).

Front 15

Stakeholder interaction model

Back 15

Reciprocal relationships between the firm and a host of stakeholders. In addition to the fundamental input of investors, employees, and suppliers, this approach recognizes other stakeholders and explicitly acknowledges that dialogue exists between a firm's internal and external environments.

Front 16

Stakeholder orientation

Back 16

Activities and processes within a system of social institutions that facilitate and maintain value through exchange relationships with multiple stakeholders.

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.

3. Responsiveness of the organization as a whole to this information.

Front 17

Corporate citizenship

Back 17

The extent to which businesses strategically meet 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.

Front 18

Reputation

Back 18

Greatest intangible asset with tangible value.

Front 19

Corporate governance (why is it there?)

Back 19

Development of formal systems or accountability, oversight, and control. Remove the opportunity for employees to make unethical decisions. Positive correlation with corporate social responsibility.

Front 20

Shareholder model of corporate governance

Back 20

Developing and improving the formal system for maintaining performance accountability between top management and the firm's shareholders. Shareholder orientation should drive a firm's decisions toward serving the best interests of investors. Creates agency problem. Criticized for its singular purpose and focus because there are other ways to invest in a business (suppliers, customers, etc.)

Front 21

Agency problem

Back 21

Where the control (managers) are in charge of the owners (investors) best interest and not their own. Creates a situation where they may not be incentivized to work in shareholders best interest.

Front 22

Stakeholder model of corporate governance

Back 22

Company must also answer to stakeholders besides shareholders. Ex. employees, customers, suppliers, government regulators, communities, and special interest groups. Once primary stakeholders are identified, managers implement the appropriate corporate governance to develop long-term relationships. Must create governance systems that consider stakeholder welfare in tandem with corporate needs and interests.

Front 23

Interlocking directorate

Back 23

Board members being linked to more than one company. Not illegal except if they are direct competitors. Lot of overlap currently.

Front 24

Executive compensation

Back 24

One of the biggest issues corporate boards face. Compensate for leadership, organizational service, and performance. Controversial topic.

Front 25

Optimization

Back 25

Trade-off between equity (equality) and efficiency (maximum productivity).

Front 26

Ethical issue vs. Ethical dilemma

Back 26

Issue has a right and wrong answer (ethical and unethical). Dilemma has negative outcomes no matter what. Only less unethical or illegal choices.

Front 27

Commission lying

Back 27

Creating a perception or belief by words that intentionally deceives the receiver of the message. Ex. lying about being at work.

Front 28

Noise lying

Back 28

Technical explanations the communicator knows the receiver doe snot understand. Makes receiver understand the true meaning of the message.

Front 29

Omission lying

Back 29

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. Ex. not putting research on tobacco boxes.

Front 30

Active bribery

Back 30

A.K.A. active corruption. Person who promises the bribe. Not facilitation payments (in some situations)

Front 31

Passive bribery

Back 31

Official who receives the bribe

Front 32

Corporate intelligence

Back 32

Collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends. Three distinct types:

1. Passive monitoring system for early warning

2. Tactical field support

3. Support dedicated to top management strategy.

Front 33

System hacking vs. remote hacking vs. physically hacking

Back 33

System = attacker already has low-level, privileged-user account

Remote = Penetrate a system through the internet

Physically = Agent has to enter a facility personally to gain access.

Front 34

Shoulder surfing

Back 34

Looking over a shoulder to see a password

Front 35

Whacking

Back 35

Wireless hacking using a radio within the range of a wireless transmission.

Front 36

Equal Employment Opportunity Commission (EEOC)

Back 36

2012. Can be sued if:

1. Refuses to hire an individual

2. Maintains a system of employment that unreasonably excludes an individual from employment

3. Discharges an individual

4. Discriminates against an individual with respect to hiring, employment terms, promotion, or privileges of employment as they relate to the definition of discrimination.

Front 37

Social responsibility history

Back 37

Industrial Revolution, Civil War (War of Northern Aggression), Triangle Shirtwaist Factory fire, The Great Depression (the New Deal),

World War II (G.I. Bill), Brown vs. Board of Education, Civil Rights Movement, Woodstock, Nixon Watergate scandal, Lockheed Airplanes

Front 38

Observed misconduct in the workplace

Back 38

Misuse of company resources, abusive behavior, harassment, accounting fraud, conflicts of interest, defective products, bibery, employee theft

Front 39

Role of organizational Ethics

Back 39

Front 40

Stakeholder Theory

Back 40

Normative=Principles and values help identify ethical guidelines that dictate how tot treat stakeholders.

Descriptive=Focuses on actual behavior, addressing decisions and strategies in stakeholder relationships

Instrumental=Examines stakeholder relationships and describes outcomes for particular behaviors

Front 41

Social Responsibility (levels)

Back 41

An organization's obligation to maximize its positive impact on stakeholders and minimize negative impact.

1. Economic

2. Legal

3. Ethical

4. Philanthropic

Front 42

Implementing a Stakeholder Perspective (steps)

Back 42

1. Assessing the Corporate Culture
2. Identifying Stakeholder groups
3. Identifying stakeholder issues
4. Assessing Organizational Commitment to Social Responsibility
5. Identifying Resources and Determining Urgency
6. Gaining stakeholder feedback