BULW 1370 Midterm

Positives of CSR

- Balance corporate power with responsibility - Discourages government regulations - Promotes long term profit - improves stakeholders relationships - Improves rep and brand loyalty

Sarbanes-Oxley Act

- Born from Enron, seeks to ensue firms maintain high ethical standards - Requires executives to vouch for accuracy of financial records and pay back bonuses based on earnings that later proved fraudulent

What is the difference between an Independent Commission and an executive agency?

- Independent Commission can only be removed for cause Executive Agency is at the mercy of the president

Negatives of CSR

- Lowers economic efficiency - imposes unequal cost among competitors - imposes hidden costs passed on to steak holders - requires skills business may lack places responsibility on business rather than individuals

What are some universal principals that help guide a managers decision making?

- Virtue ethics - utilitarianism - human rights - justice - disclosure rule

What are some reasons that ethics are ignored?

- competition - conflicts - lack of strict regulations

What are the 3 types of corporate Political Strategies?

1. Informative 2. Financial Incentive 3. Constituency building

What are the four core labor standards enforced globally?

1. no child labor 2. no forced labor 3. no discrimination 4. Allow collective bargaining

What is the rule making sequence?

1. proposed rule is drafted and published in federal register 2. Comment period follows where public can give commentary 3. Final rule published in Federal Register

Free trade

Agreement to eliminate duties to the parties involved *can be regional or bilateral

What are executive orders?

Binding legal orders from President to Federal Executive Agencies

What is the social contract?

Businesses have more responsibility than to just make money but to meet social expectations

What did Milton Friedman believe?

Businesses sole responsibility was to maximize profit while upholding the law

How can stakeholders power be exercised?

By forming coalitions

What is a B Corporation?

Companies that are held to the B Lab standards

The Business Roundtable

Created by CEO's of leading organizations to promote direct communication between businesses and policy makers

What did the 1971 Federal Election Reform act do?

Created caps on individual contributions and placed a cap on expenditures

What did the Tillman Act of 1907 banned?

Direct contributions by corporations to federal political candidate

What are examples of external factors?

Economic, Social, legal, political and technological

Most Favored Nation

Enacted in a trade agreement that ensures that one partner does not give an advantage to another partner without giving that same advantage to everyone

Multinational corporation (MNC)

Entity headquartered in one country that does business internationally

National Treatment

Equal treatment for imported goods to that are domestic

U.S Sentencing Guidelines

Establish standards to reduce criminal conduct by - assign high level officer for compliance - avoid assigning authority to risky individual - Effective communication of S&P through training - Enforce standards through discipline

What guides moral behavior?

Ethics

Dumping

Exporting a product at a price below the price it normally sales for in the home market

Where do our ethics come from?

Families, religion, philosophy, culture and law

Subsidies

Financial aid to industry from government to keep prices low or to create competition

(Ch. 8) 1st Amendment

Freedom of speech

Foreign Direct Investment (FDI)

Funds acquired by MNC to expand into foreign nation

What is dark money?

Funds given to non-profit organizations

What does the commerce clause do?

Give the government the ability to regulate business

Law of comparative advantage

Idea that countries produce the the goods and service they have a natural talent for

Import and Exports

Imports flow in Exports flow out

Trade Surplus

Imports< Exports

Trade Deficit

Imports>Exports

Anti-dumping duties

Imposed when a country tries to engage in dumping but an export tariff is added to equal the playing field

Relationships with stakeholders Inactive? Reactive? Proactive? Interactive?

Inactive- No relationship Reactive- Only acting when an issue rises Proactive- Trying to take care of issues before they surface Interactive- Working with stakeholders to reach agreements

What is the relationship between business and society?

Interdependent

(Ch.1) What type of factors affect business?

Internal and External

Internal v. external stakeholder

Internal is employed by org External is not (this includes shareholders)

What was the second regulatory agency in the U.S?

Interstate Commerce Commission (1887) to oversee railroads in America

What did the 1890 Sherman trust act do and what did it create?

It prevented monopolies and price fixing. This gave birth to the Federal Trade Commission

Buy American Laws

Laws that require or influence government agencies to purchase US goods and services rather than foreign made products

What was the decision in Citizens Untied v. Federal Election Commission?

Lifted ban of expenditures in the election process. Companies could now advocate for or against a candidate

Liberalization

Lower tariffs and trade barriers to encourage investment

Tax inversion

Moving a companies legal domicile to a lower tax nation to retain material operations in a higher paying country of origin

PAC and Super PAC

PAC is unofficial representative of a candidate Super PAC is unofficial representative of an agendac

What do poor ethics and short term profit maximization lead to? Examples?

Poor business choices that creates crisis, enron, world com and Financial crisis of 2008

( CH. 2)What are scenarios?

Predicted events that a company has a plan developed for

What did the 1947 Taft Hartley Act do?

Prohibited labor unions to contribute to federal political candidates

What did the 2002 Bi-partisan campaign Reform Act do?

Prohibited soft money contributions to national party committees as well as raise individual contribution cap and prohibited corporations from running ads 30 days before primary and 60 days before general

(Ch.7) What does the government set?

Public policy

What do peak associations and trade associations do?

Represent the interest of the business

What do administrative law judges hear cases on

Rule violations

What is the main function of Administrative Agencies?

Rulemaking

What is a good company that exemplifies planning ahead?

Shell (Oil Embargo)

What is a pluralistic society?

Society with multiple groups and institution through which power is diffused

Stakeholder

Somebody that has a vested interest in the company, not just shareholders but employees, distributors ect

What is a lobbyist?

Someone who persuades lawmakers to pass favorable laws to who they represent

Business ethics across organizational functions is

Spreading the same ethics throughout the organizations department

What happened after Citizens United?

Super PACS formed

Tariff

Tax

What did congress pass in 2008 and what did this create?

The Dodd-Frank Wall Street Reform and Consumer Protection was passed which created the Consumer Financial Protection Bureau

What was the first regulatory agency in the U.S?

The comptroller of the currency established in 1863 to charter and regulate national bank

(Ch. 5&6) What is ethics?

The conception of right and wrong

(Ch.3) What is corporate social responsibility? (CSR)

The duty of the corporation to create wealth in ways that protect the society

What act was passed out of response to 9/11?

The homeland security act

What should managers do to help in managing different scenarios?

They should be constantly scanning their environment

What is the Iron Law of Responsibility?

Those who abuse power in the eyes of society will lose it

How do you implement public policy?

Through federal regulations

How do businesses get involved in political process?

Through lobbying

How is social performance reported?

Through social audit

Why do corporations hire lobbyist?

To express their interest

Why were Political Action Committees (PACs) created?

To try to find a way around individual contributions.

Duty

Total tariff paid

What does the U.S foreign Corrupt Practice of 1977 act prohibit?

U.S business executives from paying bribes to foreign government officials, political parties or political candidates to obtain favorable treatment

Protectionism

Use of trade agreements to shield domestic industries from foreign competitors

What are corporations viewed as legally?

a legal person who can prosecuted for crimes

What is fiscal policy?

collected money from the government to stimulate the economy

What were soft laws and international norms created for?

encourage global CSR

What is performance expectation gap?

failure to understand stakeholder's expectations

Studies show that there is a link between business ethics and?

financial performance

(Ch. 4) Globalization

increasing business across national borders

What does an ethics compliance program do?

lower a corporation's culpability (blame) for companies

Bribery

questionable or unjust payment to a government official to ensure a business transaction

What is soft money?

unregulated money given to committee not actual candidate