Business Chapter 2

Front 1

Explain the concepts of business ethics and social responsibility.

Back 1

Business ethics refers to the standards of conduct and moral values that govern actions and decisions in the workplace. Businesspeople must take a wide range of social issues into account when making decisions. Social responsibility refers to management's acceptance of the obligation to consider profit, consumer satisfaction, and societal well-being of equal value in evaluating the firm's performance.

Front 2

To whom do businesses have responsibilities?

Back 2

Businesses are responsible to customers, employees, investors, and society.

Front 3

If a firm is meeting all its responsibilities to others, why do ethical conflicts arise?

Back 3

Ethical conflicts arise because business must balance doing what is right and doing what is profitable.

Front 4

Describe the factors that influence business ethics.

Back 4

Among the many factors shaping individual ethics are personal experience, peer pressure, and organizational culture. Individual ethics are also influenced by family, cultural, and religious standards. Additionally, the culture of the organization where a person works can be a factor.

Front 5

What role can an ethics compliance officer play in a firm?

Back 5

Ethics compliance officers are charged with deterring wrongdoing and ensuring that ethical standards are met.

Front 6

What factors influence the ethical environment of a business?

Back 6

Individual ethics and technology influence the ethical environment of a business.

Front 7

List the stages in the development of ethical standards.

Back 7

In the preconventional stage, individuals primarily consider their own needs and desires in making decisions. They obey external rules only from fear of punishment or hope of reward. In the conventional stage, indiciduals are aware of and respond to their duty to others. Exxpectations of groups, as well as self-interest, influence behavior. In the fial, postconventional stage, the individual can move beyond self-interest and duty to include consideration of the needs of society. A person in this stage can apply personal ethical principles in a variety of situations.

Front 8

What is the preconventional stage in the development of ethical standards?

Back 8

In the preconventional stage the individual looks out for his or her own interests and follows rules out of fear of punishment or hope of reward.

Front 9

What is the conventional stage in the development of ethical standards?

Back 9

IN the conventional stage, individuals are aware of and respond to their duty to others. Expectations of groups, as well as self-interest influence behavior.

Front 10

What is the postconventional stage in the development of ethical standards?

Back 10

In the final, postconventional stage, the individual can move beyond self-interest and duty to include consideration of the needs of society. A person in this stage can apply personal ethicla principles in a variety of situations.

Front 11

What is the difference between the conventional and post conventional stages?

Back 11

IN the conventional stage, the person considers the interests and expectations of others, and in the postconventional stage, he or she considers personal, group, and social interests.

Front 12

Identify common ethical dilemmas in the workplace.

Back 12

Conflicts of interest exist when a business person is faced with a situation in which an action benefiting one person has the potential to harm another, as when the person's own interests conflict with those of a customer. Honesty and integrity are valued qualities that engender trust, but a person's immediate self-interest may seem to require violating these principles. Loyalty to an employer sometimes conflicts with truthfulness. Whsitle-blowing is a possible response to misconduct in the workplace, but the personal costs of doing so are high.

Front 13

What are honesty and integrity and how do they differ?

Back 13

Honesty is the trait of telling the truth, integrity goes beyond truthfullness and means adhering to deeply felt ethical principles.

Front 14

How can loyalty and truth come into conflict for any employee?

Back 14

Truth and loyalty can come into conflict when the truth about a company or situation is unfavorable.

Front 15

Discuss how organizations shape ethical behavior.

Back 15

Employees are strongly influenced by the standards of conduct established and supported within the organizations where they work. Businessses can help shape ethical behavior by developing codes of conduct that define their expectations. Organizations can also use this training to develop employees' ethics awareness and reasoning. They can foster ethical action through decision-making tools, goals consistent with ethical behavior, and advice hotlines. Executives must also demonstrate ethical behavior in their decisions and actions to provide ethical leadership.

Front 16

What is a code of conduct?

Back 16

A code of conduct is a formal statement defining the way the organization expects and requires employees to resolve ethical questions that arise at work.

Front 17

How does ethical leadership contribute to ethical standards throughout a company?

Back 17

Employees more readily commit to the company's core values when they see that leaders and managers behave ethically and when the ethics program is not seen as a way to protect top executives from being blamed for wrongdoing.

Front 18

Describe how businesses' social responsibility is measured.

Back 18

Today's businesses are expected to weigh their qualitative impact on consumers and society, in addition to their quantitative economic contributions such as sales, employment levels, and profits. One measure is their compliance with labor and consumer protection laws and their charitable contributions. Another measure some businesses take is to conduct social audits/ Public-interest groups also create standards and measire companies' performance relative to those standards. Consumers may boycott groups that fall short of social standards.

Front 19

What is meant by social responsibility and why do firms exercise it?

Back 19

Social responsibility is management's acceptance of its obligation to consider profit, consumer satisfaction, and societal well-being to be on equal value when evaluatinmg the firm's performance. Businesses exercise it because it is required by law, because it enhances the company's image, or because management believes it is ethical to do so.

Front 20

What is a social audit?

Back 20

A social audit is a formal procedure to identify and evaluate all company activities that relate to social issues such as conservation, employment practices, environmental protection, philanthropy.

Front 21

Summarize the responsibilities of business to the general public, customers, and employees

Back 21

The responsibilities of business to the general public include protecting the public health and the environment and developing the quality of the workforce. Additionally, many would argue that businesses have a social responsibility to support charitable and social causes in the communities in which they earn profits. Business also has a social and ethical responsibility to treat customers fairly and protect consumers upholding the rights to be safe, to be informed, to choose, and to be heard. Businesses have wide-ranging responsibilities to their workers. THey should make sure that the workplace is safe, address quality-of-life issues, ensure equal opportunity, and prevent sexual harrassment.

Front 22

What is green marketing?

Back 22

Green marketing is a marketing strategy that promotes environmentally safe products and production methods.

Front 23

What is corporate philanthropy?

Back 23

Corporate philanthropy includes cash contributions, donations of equipment and products, and support for the volunteer efforts of company employees.

Front 24

What are the four main consumer rights?

Back 24

The four main consumer rights are the right to be safe, to be informed, to choose, and to be heard.

Front 25

Explain why investors and the financial community are concerned with business ethics and social responsibility.

Back 25

Investors and the financial community demand that businesses behave ethically as well as legallly in handling their financial transactions. Businesses must be honest in reporting their profits and financial performance to avoid misleading investors. The Securities and Exchange Commission is the federal agency responsible for investigating suspicions that publicly traded firms have engaged in unethical or illegal financial behavior.

Front 26

Why do firms need to do more than just earn a profit?

Back 26

Firms need to do more than just earn a profit because the law requires them to behave in a legal and ethical manner and because investors and shareholders demand such behavior.

Front 27

What is the role of the Securities and Exchange Commission?

Back 27

Among other functions the Securities and Exchange Commission investigates suspicions of unethical or illegal behavior by publicly traded firms.

Front 28

Sarbanes-Oxley Act

Back 28

Federal legislation designed to deter and punish corporate and accounting fraud and corruption and to protect the interests of workers and shareholders through enhanced financial disclosures, criminal penalties on CEO's and CFO's who defraud investors, safeguards for whistle-blowers, and establishment of a new regulatory body for public accounting.

Front 29

Business Ethics

Back 29

Standards of conduct and moral values involving right and wrong actions arising in the work environment.

Front 30

Conflict of interest

Back 30

situation in which an employee must make a decision about a business's welfare versus personal gain.

Front 31

whistle-blowing

Back 31

employee's disclosure to company officials, government authorities, or the media of illegal, immoral, or unethical practices committed by an organization.

Front 32

Code of conduct

Back 32

formal statement that defines how the organization expects employees to resolve ethical issues.

Front 33

Recycling

Back 33

reprocessing of used materials for reuse

Front 34

corporate philanthropy

Back 34

act of an organization giving something back to the communities in which it earns profits.

Front 35

consumerism

Back 35

public demand that a business consider the wants and needs of its customers in making decisions.

Front 36

sexual harassment

Back 36

unwelcome and inappropriate actions of a sexual nature in the workplace.

Front 37

boycott

Back 37

to combine in abstaining from, or preventing dealings with, as a means of intimidation or coercion: to boycott a store

Front 38

pollution

Back 38

enviornmental damaage

Front 39

product liability

Back 39

refers to the responsibility of manufacturers for injuries and damages caused by their products.

Front 40

family leave

Back 40

12 weeks off to care for someone elderly, sick, or if you are sick, or if you have a baby or are adopting.

Front 41

Equal Employment Opportunity Commission

Back 41

created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin in any personnel action.

Front 42

Sexism

Back 42

discrimination against members of either sex, but primarily women.