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33 Cards in this Set

  • Front
  • Back
Baumarts study
what is ethics: 50% feelings, 25% religion, 18% golden rule.
Problem: feelings are misguided, religion and golden rule do not always fit for corps.
Ethics are the principles of conduct governing how an individual should live and work.
the standards against which corporate practices are evaluated
Ethics implies investigating organizational relationships and exposing the results
Ethics are the responsibility of corps or individuals?
1) corporate rules and policies cause individuals to act a certain way
2) It is the individuals responsibility to adhere to moral standards
-The answer is between the two extremes—collective corporate morality
Diamond E

Justice and Fairness
Rights and duties
Ethics of care
Justice and Fairness
a. Distributive justice: fair distribution of social benefits and burdens, idealistic
b. Retributive Justice: imposition of penalties on people who do wrong.
c. Compensatory justice: compensating people for what they have lost
: utility before emotion. Ford Pinto, cost benefit analysis.
Rights and duties
: individual entitlement—labour rights, may be legal or moral rights.
Ethics of Care
showing compassion to others, going out of your way and maybe losing money to help others.
Issues around corporate governance
- CEO influence on the BOD
- Directors lack of due diligence

Globe and Mail report on BODs
- issue with audit committee independence
- boardroom culture
- board member staffing
- interlocking directorship
- lack of stock ownership
- transparency
Recommendations for Corporate Gov changes
Audit committee be completely independent
Independent BOD, at least majority
Directors hold shares
More transparency.
Cultural Relativity
what is normal in different places
Minimal duty:
only what is required
Enlightened Duty
going beyond to abide by ethics and duty of care.
Common issues with employeees
- Extortion/bribes
- Computer/info theft
- Trade Secrets
- Insider trading
- Employee rights:
- Conflict of interest
- Gifts
Employee Rights
privacy, contractual rights and right to Due process (notice, grievance, appeal. CPD
Organizations duty to employees
wages, working conditions, and employee rights^
Controversial employee rights:
1) Participation in decision making
2) Right to due process vs employment at will
5 participants in the whistle blowing process

1) Blower
2) Outlet for blower
3) Dirty Hands
4) Bystanders
5) Society at large
Blowing process
1) The event
2) Decision to pull the trigger
3) The action stage. Five choices:
a. Blow alone, or with group?
b. Internally or publically
c. Anonymously?
d. Proof?
e. Identify target or not?
4) Assessing reactions
5) Results of the blowing: 2 outcomes: people believe or not
Areas of concern: relations to customers
- Product injuries: tobacco etc
- Deceptive Selling practices: bank approval ads but not actually
- Shoddy Products: remains a problem with manufacturer
- Products that break to soon: another problem with manufacturer
- Warranty not honoured: loop holes in small print etc
Market approach to consumer protection
let the free market deal with it, consumers will eventually only support good companies and pay for it.
- Issues: Assumes that customers have full product knowledge
Assumes customers are all rational, but actually buy whats cheap or impulse buys what they want.
Manufacturer vs customer rights. 3 theories
Contract theory
Due Care theory
Social cost theory
Contract theory, 4 duties
only duty is that of a contract. Co. has 4 moral duties:
- Duty to comply: live up to ad claims
- Duty of disclosure: all parties must know what they are getting in to
- Duty to not misrepresent: deceit
- Duty not to coerce: force or pressure parties to act a certain way

Problem with contract theory: usually retailer between customer and manufacturer
Due Care theory
consumer is seen as vulnerable and the manufacturer must honour that as the expert. Especially with tech. or pharma. Companies have a duty not to harm their customers. Manufacturer must exercise care and produce a safe product. If unforeseen effects come up manufacturer is not liable

Responsibilities of manufacturer:
1) Design – no hidden dangers
2) Production process- good quality control
3) Info – notices labels and instruction manuals

Problem with due care theory: there is no way of telling how much care is enough
Social Cost View:
extends manufacturers duties beyond contractual obligations and due care, focuses on preventing harm. Holds that manu should bear any cost of unforeseen harm.

Theory believes if your going to make something you have to be responsible.

Problem: unfair to business, no progression in society. Violates compensatory justice in which companies are only responsible if the result could have been forseen. Would place heavy burden on insurance co.

Just because a technology went bad doesn't mean its unethical
Corporate government and ethical management
- Lay focused on pressuring gov. to deregulate energy industry. Helped with campaigns.
- Enron values: communication, respect, integrity, and excellence
- Skillings entered with the idea to sell gas futures to customers. Very risky. Rules all trades must have an offsetting hedge. Each trader must report daily gain/loss.
- Enron moved into the trading business, electricity etc.
- Stock option were given to employee as they were not expensed.
- Revenue recognition was allowed at time of deal.
Petite playthings
Relation with employees

- Cassady took over new territory
- He found out that the previous sale man had been bribing the biggest customer, with 750$ pmts twice a year.
- Customer basically says give me money or I will go somewhere else
CFX Publishing
employee rights and freedoms/relations
- rumours of sales rep has intimate relations with customers
- Is it the companies business?
- Manager approaches it objectively after being promoted
- Sales rep shows to be a bit slutty
- Sale rep was supposed to be promoted but manager didn't know because she didnt get along with team and rumours.
- Manager takes time to get to know sales rep
- Sales rep has good relations with clients but acts inappropriately
- The manager kindly talked to the sales rep about behaviour
Why should my conscience both me?
Relation with customers
- Break for aircraft contract was underbid
- The model was flawed from the start but ignored
- Prototypes were unsafe because of design flaws
- Team lied about initial tests
- When manager found out he didn't want to be blamed so he lied as well.
- Successful test was staged
- Formal reports needed to be forged to carry on the lie.
- As the issues goes up the ranks more and more people say it has to go through even though some people point out flaws.
- One manager claims he has no control over the situation therefore no responsibility
- Two people writing the report made a SYA file with correct data and are given the choice to write the report or quit.
- No one wanted to sign the report
- The report went through and numerous accidents happened during tests
- FBI found out from employee and started investigating
- Report writer quit and had to testify against the company
NES China
Operating globally
- German company is trying to make a go in china
- The Chinese branch struggles to make relations without bribing
- Want to establish a holding company but need approval
- Bribing went against German code of conduct
- Mixed opinions among team
- Continuously their documents were not approved by government
- The decided to take representative out for dinner but that wasn't enough
- They eventually paid a law firm to do their dirty work for them
- Business deal would not have been done in time without it. What is more important?
Operating globally
- Expat’s assignment was to restore safety standards in African facilities of oil co.
- Work would have to be done by semi skilled locals
- Expat was offered bribe from local contractor, he declined
- No more offers came when word got out
- Expat not sure who to tell
- Expat learns about previous managers going crazy
- Found out it was the staff that didn't like them
- Police chief asked for money from the company fund that he had looked through but he said no
Chem Corp

- New manager was told by his boss to start a marketing campaign for a new product
- Manager found out that the product would soon be taken off the shelves due to safety hazards
- Boss wants him to push the product out before this happens and says it will help managers career
- Manager could reject offer to market or quit…