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51 Cards in this Set

  • Front
  • Back
Ownership Theory of the firm
Firm is the property of its owners.
Purpose: to make money for the owners
Stakeholder Theory of the firm
Business is to create value for society. All Stakeholder interest must be taken into account. Corporations serve a broader purpose
Define: Stakeholder
Persons and groups that affect, or are affected by, an organization's decisions, policies, and operations.
Define: Market Stakeholder
Those that engage in Economic transactions with the company as it carries out it's primary purpose.
EX: Employees, Stockholders, Creditors, Suppliers, Customers, Retailers
Define: Non-Market Stakeholder
Can affect, or are affected by a firm's actions, but have no direct economic exchange.
EX: Communities, Gov't, Activist Groups, Media, General Public
Define: Stakeholder Interests
Essentialy, the nature of each group's stake.
Define: Stakeholder Power
the ability to use resources to make things happen
What are the Four (4) Types of Stakeholder Power?
Voting Power, Economic Power, Political Power, Legal Power
What are the Four (4) Types of Corporate engagement with Stakeholders?
Inactive, Reactive, Proactive, Interactive
Define: Stakeholder Engagement
Process of ongoing relationship building between a business and stakeholders
What are the Six (6) Forces of Changing Societal Expectations?
Changing Societal Expectations
Growing Emphasis on Ethical Value
Evolving gov't regulation
Dynamic Natural Environment
Explosion of New Technology
Define: Public Issue
An issue that is of concern to an org's stakeholders
Define: Performance-Expectations Gap
The Gap between stakeholder expectation and what an organization is actually doing.
Define: Public Issue Life Cycle
Four Phases: Changing Stakeholder Expectation,
Political Action,
Formal Gov't Action,
Legal Implementation
Define: Public Affairs Management
Active management of a company's external relations
Define: Issue Management
Structured and systematic process to aid Orgs about public issues
Steps of Issue Management Process
Issue Identification
Issue Analysis
Policy Options
Program Design
Define: Crisis Management
Process Orgs use to respond to short-term and immediate crisis
Define: Iron Law or Responsibility
In the long run, those who do not use power in ways that society considers responsible will tend to lose it
Define: Charity Principle
Business should give voluntarily and to society's needy persons and groups
Define: Stewardship Principle
Business have an obligation to see that everyone benefits from their firm's actions.
Define: Reputation
Qualities associated with an org that may influence the the orgs relationships with its stakeholders
What are the arguments for Corporate Social Responsiblity?
Balances Corporate Power with Responsiblity
Discourages Gov't Regs
Promotes Long-Term Profits
Improves Business Value and Reputation
Define: Enlightened Self-Interest
The interrelated social and economic value in loking toward the long term.
What are the Arguments Against Corporate Social Responsiblity
Lowers Economic Efficiency and Profits
Imposes Unequal Costs Among Competitors
Requires Social Skills that Business Lack
Places Responsiblity on Businesses rather than Individuals
Define: Legal Obligations
Following laws and regulations, you maintain a minimum level of social responsiblity.
Define: Corporate Citizenship
Refers to Businesses acting responsibly toward their stakeholders
What are the Four (4) steps of Corporate Citizenship?
Proactively addressing business and society issues,
Building stakeholder partnerships,
discovering business opportunities through social strategic goals,
transforming a concern for fin. performance into a vision of corporate financial and social performance.
Define: Social Performance Audit
Systematic evaluation of an organizations social and ethical performance
Define: Triple Bottom Line
Financial, Social, and Environmental Reports
Define: Ethics
A conception of right and wrong conduct
Define: Ethical Principles
Guides to Moral Behavior
Define: Business Ethics
The Applicatin of General Ethical Ideas to Business Behavior
Define: Functional Area Ethics
Application of Ethical principles to unique industry specific circumstances
Define: Conflict of Interests
Loyalty or Obligation to the company is in conflict with self-interest and the interest of others
Why should Business be Ethical?
Meet demands of stakeholders,
To Enhance Business Performance,
Comply with Legal Requirements
Why do Ethical Problems Occur?
Personal gain and selfish Interest,
Competitive Pressures on Profit,
Business Goal vs Personal Values,
Cross-Cultural Contradictions
How are Laws and Ethics Similar?
they both define proper and improper behavior.
How are Laws and Ethics Different?
Ethical principles tend to be broader than legal principles.
How does Ethics go beyond Law?
Laws are minimum standards of Responsiblility
Ethics deals with complex human dilemmas that go beyond legal rules
What are the Three (3) Key Components of a Company's Ethical Performance?
The Values & Virtues of its Managers,
The Personal Character and Spirituality of its managers,
Traditions, Attitudes, and Business Practices built into the Company's Culture.
What are Stages of Moral Development?
How one understands values is based on one's level of maturity
Name Kohlberg's Six (6) Stages of Moral Development.
1: Punishment Avoidance
2: Reward Seeking
3: Social Groups
4: Society at Large
5: Moral beliefs
6: Universal Principles
Corporate Culture
Personal values and moral character play key ruoles in a company's ethical performance.
Ethical Climates
The unspoken understanding among employees of what is and is not acceptable
Define: Utilitarian Reasoning
A Cost/Benefit analysis of a decision or action. The costs and benefits can be economical, social, or human. If the benefits are greater than the costs, the action is ethical.
Challanges to Utilitarian Reasoning
Difficult to measure Cost and Benefit,
Difficult to establish proper boundaries of measurement,
It often fails to consider the means for acheiving the beneficial end.
Define: Human Rights
Person or group is entitiled to be treated in a certain way: life, safety, freedom, due process
Define: Justice
exists when benefits and burdens are distributed equitably and according to some accepted rule
Define: Equality of Distribution
Everyone gets the same thing (communist)
Define: Equality of Opportunity
Everyone gets the same opportunity