Chp 2: Social Responsibility And Ethics

Front 1

Managerial Ethics

Back 1

The study of morality and standards of business conduct

Front 2

Ethical Dilemma

Back 2

Having to make a choice between two competing but arguably valid options.

Front 3

Ethical Lapse

Back 3

Decision that is contrary to an individual's stated beliefs and policies of the company.

Front 4

Ethnocentricity

Back 4

The view that your perspective is correct and the views of people of other cultures are inferior.

Front 5

Basic Approaches to Ethical Decision Making

Back 5

1. Utilitarian

2. Moral Rights

3. Universalism

4. Justice

Front 6

The Utilitarian Approach

Back 6

Focuses on the consequences of an action; You try to make decisions that result in the "greatest good."

Front 7

The Moral Rights Approach

Back 7

Focuses on examination of the moral standing of actions independent of their consequences; Some things are just "right" or "wrong" independent of consequences; from two courses of action, choose the one that conforms with moral principles and provides and positive consequences

Front 8

The Universal Approach

Back 8

Choosing a course of action that you believe can apply to all people under all situations; "do unto others as you would have them do unto everyone, including yourself. "

Front 9

The Justice Approach

Back 9

Focuses on how equitably the costs and benefits of actions are distributed; In general costs and benefits should be equitably distributed, rules should be impartially applied, and those damaged because of inequity or discrimination should be compensated

3 types:

1. Distributive

2. Procedural

3. Compensatory

Front 10

Distributive Justice

Back 10

The equitable distribution of rewards and punishment based on performance.

Front 11

Procedural Justice

Back 11

Ensuring that those affected by managerial decisions consent to the decision-making process and that the process is administered impartially.

Front 12

Compensatory Justice

Back 12

If distributive and procedural justice fail, those hurt by the inequitable distribution of rewards are compensated; affirmative action

Front 13

Interpersonal Justice

Back 13

Focuses on the polite and respectful treatment of people.

Front 14

Informational Justice

Back 14

Focuses on on the timely communication or reasonableness of explanations of organizational actions.

Front 15

Moral Intensity

Back 15

Is the degree to which people see an issue as an ethical one.

Front 16

Magnitude of Consequences

Back 16

The anticipated level of impact of the outcome of a given action, which is independent of whether the consequences are positive or negative.

Front 17

Social Consensus

Back 17

The extent to which members of a society agree that an act is either good or bad

Front 18

Probability of Effect

Back 18

The moral intensity of an issue rises and falls depending on how likely people think the consequences are.

Front 19

Temporal Immediacy

Back 19

A function of the interval between the time an action occurs and the onset of its consequences.

Front 20

Proximity

Back 20

The physical, psychological, and emotional closeness the decision maker feels to those affected by the decision.

Front 21

Concentration of Effect

Back 21

The extent to which consequences are focused on a few individuals or dispersed across many.

Front 22

Moral Intensity Framework

Back 22

Can be used to anticipate the moral intensity of an issue and to diagnose the reasons for differing views people have about that intensity.

6 components:

1. Magnitude of consequences

2. Social consensus

3. Probability of effect
4. Temporal immediacy

5. Proximity

6. Concentration of effect

Front 23

Efficiency Perspective

Back 23

The concept that a manager's responsibility is to maximize profits for the owners of the business.

Front 24

Externality

Back 24

An indirect or unintended consequence imposed on society that may not be understood or anticipated.

Consumers cannot factor in the true costs and may not be willing to pay for them even when externalities can be anticipated.

Front 25

Social Responsibility Perspective

Back 25

Argues that society grants existence to firms(such as through limited liability for corporations), that firms have responsibilities to society as a whole, and that it is socially irresponsible to only maximize shareholder wealth.

Front 26

Stakeholder

Back 26

An individual or group who has an interest in and is affected by the actions of an organization; Includes shareholders, customers, employees, financiers, suppliers, the media, the communities in which the business operates, and society at large.

Front 27

Concerns with Social Responsibility Perspective

Back 27

One of the key concerns is that important terms such as reasonable return and legitimate returns cannot be defined adequately given that reasonable returns of shareholders and legitimate concerns of other stakeholders may conflict.

Front 28

Comparing the Efficiency and Stakeholder perspectives

Back 28

Actions that benefit shareholders, but harm the other stakeholders would be viewed as managerially responsible from the efficiency perspective, but managerially irresponsible from the social responsibility perspective and vice versa if things were flipped around.

Front 29

How Corporations Respond to Stakeholder Perspectives

Back 29

1. Defenders

2. Accommodaters

3. Reactors

4. Anticipators

Front 30

Defenders

Back 30

Tend to fight efforts that they see as resulting in greater restriction and regulation of their ability to maximize their profits.

Front 31

Accommodaters

Back 31

Are less aggressive with fighting restrictions and regulations, but they too change only when legally compelled to do so.

Front 32

Reactors

Back 32

Make changes when they feel the pressure from constituencies is sufficient such that nonresponsiveness could have a negative economic impact on the firm.

Front 33

Anticipators

Back 33

Tend to believe they are obligated not to harm a variety of stakeholders independent of laws or pressures that restrict or regulate their actions; take action to avoid harming constituencies even when the constituencies might not be aware of the potential danger.

Front 34

Strategic Corporate Social Responsibility Perspective

Back 34

A three criteria model that can help managers focus on social areas where there is the highest possibility of created shared value for the business and society.

3 Criterion:

1. Inside-out approach

2. Outside-in approach

3. Outside-out approach

Front 35

A code of ethical conduct

Back 35

A formal settlement that outlines types of behavior that are and are not acceptable; typically a formal 1-3 page statement

Front 36

Whistle Blower

Back 36

An employee who discloses illegal or unethical conduct on the part of others in the organization.

Front 37

Foreign Corrupt Practices Act (FCPA)

Back 37

A law prohibiting employees of U.S. firms from corrupting the actions of foreign officials, politicians, or candidates for office.

Front 38

The Manager

Back 38

As a manager, take personal responsibility for your decisions so that they align with your ethical framework. If you adopt an ethical approach, apply it consistently.

Front 39

Inside-Out Approach

Back 39

Managers can look inside the company at issues that are more rather than less important as a function of the company's strategy and business activities.

Front 40

Outside-in approach

Back 40

Managers can look outside the company at issues the company can influence.

Front 41

Outside-out approach

Back 41

Managers look at social issues in general terms to the extent that they're problematic, meaning they assess the social issues that come into focus as a function of the first two criteria(inside-out and outside-in).

Front 42

The Organization

Back 42

Companies have a big impact on ethical decision making, such as through a culture that emphasizes generating revenues.

Front 43

Successfully Implementing Code of ethics

Back 43

Employees will not take a code of ethics seriously unless the company reinforces the code by communicating that they're serious about enforcing it.

Front 44

Communication

Back 44

To effectively communicate ethical standards, a company must repeatedly communicate the standards through various means.

Front 45

Training

Back 45

People will need engaging training that inspires greater retention of the learning points to properly learn a company's code of ethics.

Front 46

Reward and Recognition

Back 46

A company should reward and recognize employees that comply with its code of ethics.

Front 47

Examples set by Top Managers

Back 47

Top managers can set an example of ethical behavior which has far reaching effects in a company such as damaging the best intentions and implementations of any corporate ethics program.