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