Business' Ethics week one
Bribery
In many cultures, giving bribes, also known as facilitating payments, is an acceptable business practice. Companies that do business internationally should be aware that bribes are an ethical issue, and the practice is more prevalent in some countries than in others.
Multinational corporations (MNCs)
MNC's strategy focuses on opportunities throughout the world. Because of their size and financial power, MNCs have been the subject of much ethical criticism, and their impact on the countries in which they do business has been hotly debated.
Pollution and Natural environment
Many countries are working together to create alliances and standards for environmental responsibility to minimize the negative effects of pollution. Some countries are taking legal action against polluting firms in an effort to defend air and water quality. In some countries, however, groups have lobbied governments to increase the level of pollution they allow.
executive compensation
One of the biggest issues that corporate boards of directors
Opportunity Factors
Opportunity describes the conditions in an organization that limit or permit ethical or unethical behavior. Opportunity results from conditions that either provide rewards, whether internal or external, or fail to erect barriers against unethical behavior. Opportunity relates to individuals' immediate job context: where they work, with whom they work, and the nature of the work.
"We" versus "them" is known as _____________
Self-reference criterion
Implementing a Stakeholder Perspective
Step 1: Assessing the corporate culture Step 2: Identifying stakeholder groups Step 3: Identifying stakeholder issues Step 4: Assessing organizational commitment to social responsibility Step 5: Identifying resources and determining urgency Step 6: Gaining stakeholder feedback
WTO (World Trade Organization)
The ________________ addresses economic and social issues involving agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards, food sanitation regulations, services, and intellectual property. It also provides legally binding ground rules for international commerce and trade policy. The organization attempts to reduce barriers to trade between and within nations and settle trade disputes.
stakeholder orientation.
The degree to which a firm understands and addresses stakeholder demands
Sexual and Racial Discrimination
Various U.S. and European laws prohibit businesses from discriminating on the basis of sex, race, religion, or disabilities in their hiring, firing, and promotion decisions. However, the problem of discrimination is still a reality in the world.
Price Discrimination
When a firm charges different prices to different groups of customers, it may be accused of price discrimination. When a market is artificially divided into segments and each segment is subject to different prices, inequalities may emerge that cannot be explained by added costs. When companies market their products outside their own countries, the costs of transportation, taxes, tariffs, and other expenses can raise their prices.
Individual Factors
When people need to resolve ethical issues in their daily lives, they often base their decisions on their own values and principles of right or wrong. In the workplace, ethical issues can involve honesty, conflicts of interest, discrimination, nepotism, and theft, among others. The individual's stage of cognitive development can affect their decisions. Individual factors include gender, education, nationality, age, and locus of control.
Telecomm Issues
With the advent of satellites, email, and the internet, information can be accessed in a matter of seconds instead of weeks; as a result, businesses can become the victims as well as the perpetrators of unethical actions.
MNCs
___________ operate on a global scale with ties to multiple nations and have been the subject of much ethical criticism
intellectual property
____________________ refers to ideas and creative materials people develop to solve problems, carry out applications, educate, and entertain others.
code of conduct
a written document that may contain some inspirational statements but usually specifies acceptable or unacceptable types of behavior
Pacesetting leadership style
can create a negative climate because of high standards that he or she sets
statement of values
conceived by management and are fully developed with input from all stakeholders
code of ethics
consists of general statements, sometimes inspirational, that serve as the basis for rules
Money laundering
consists of using or transferring illegally received funds in a financial transaction to conceal their source of ownership or to facilitate illegal activity.
Coercive leadership style
demands instantaneous obedience and focuses on achievement, initiative, and self-control
values orientation
develop shared values. Although penalties are attached, the focus is more on an abstract core of ideals such as respect and responsibility
Secondary stakeholders
do not typically engage in transactions with a company and thus are not essential for its survival; these include the media, trade associations, and special-interest groups.
codes of conduct
formal statements that describe what an organization expects of its employees
facilitating payments
giving bribes
Authoritative Leadership
inspires employees, facilitates change, and creates a strong positive performance climat
Ethical relativism
is the belief that only one culture defines ethical behavior for the whole globe with no exceptions
Cultural relativism
is the concept that morality varies from one culture to another, and business practices are therefore differentially defined as right or wrong by particular cultures.
business relativist
may be no ethical standards except for the ones in the transaction culture, or none at all
code of conduct
may contain inspirational statements but specifies acceptable/unacceptable behavior
Dumping
occurs when companies sell products in foreign markets at low prices that do not cover all the costs of the products
Reputation
one of an organization's greatest intangible assets with tangible value. The value of a positive reputation is difficult to quantify, but it is very important. A single negative incident can influence perceptions of a corporation's image and reputation instantly and for years afterwards.
compliance orientation
order by requiring that employees identify with and commit to specific required conduct. It uses legal terms, statutes, and contracts that teach employees the rules and penalties for noncompliance
Intellectual property
refers to ideas and creative materials people develop to solve problems, carry out applications, educate, and entertain others.
democratic leadership
relies on participation and teamwork to reach collaborative decisions
statement of values
serves the general public and also addresses distinct groups such as stakeholders. Values statements are conceived by management and are fully developed with input from all stakeholder
Transformational Leadership
strive to raise employees' level of commitment and foster trust and motivation
code of ethics
the most comprehensive and consists of general statements, sometimes altruistic or inspirational, that serve as principles and the basis for rules of conduct
Stakeholder interaction mode
there are two-way relationships between the firm and a host of stakeholders. In addition to the fundamental input of investors, employees, and suppliers, this approach recognizes other stakeholders and explicitly acknowledges the dialogue that exists between a firm's internal and external environments.
Primary stakeholders
those whose continued association is absolutely necessary for a firm's survival; these include employees, customers, investors, and shareholders as well as the governments and communities that provide necessary infrastructure.
To promote legal and ethical conduct, an organization should develop an organizational ethics program by establishing, communicating, and monitoring the ethical values and legal requirements that characterize its history, culture, industry, and operating environment.
true
stakeholder model of corporate governance
adopts a broader view of the purpose of business
Five top recommendations to CEOs for rebuilding trust and confidence in American firms
1Making customers the top priority 2 Assuming personal responsibility and accountability 3 Communicating openly and frequently with customers 4 Handling crises more honestly 5 Sticking to the code of business ethics no matter what
Common Mistakes in Developing a Training Program
1Not having a clear understanding of the goals of the program from the beginning 2 Not setting realistic and measurable program objectives 3 Senior management's failure to take ownership of the ethics program 4 Developing program materials that do not address the needs of the average employee 5 Transferring a domestic program internationally 6 Designing a program as a series of lectures
Stakeholders orientation
A __________________ is the degree to which a firm understands and addresses stakeholder demands and is comprised of: the organization-wide generation of data about stakeholder groups and assessment of the firm's interactions with these groups the distribution of this information throughout the firm the organization's responsiveness as a whole to this information
price discrimination
A major ethical issue in international business is how products sold in other countries are priced. When a firm charges different prices to different groups of customers, it may be accuse
Human Rights
Advancing human rights includes the following principles: Engage in an open dialog with workers and management. Be aware of human rights issues and concerns in each country in which the company engages in business. Adopt the prevailing legal standard but seek to embrace a "best practices" approach and standard.
Organizational Factors
Although people can and do make individual ethical choices in business situations, no one operates alone. Research has shown that in the workplace, an organization's values often have a greater influence on decisions than a person's own values. Although people outside the organization, such as family members and friends, also influence decision-makers, an organization's culture and structure operate through the relationships of its members to influence their ethical decisions.
Transactional Leadership
attempt to create employee satisfaction through negotiating or "bartering" for desired behaviors or levels of performance.
coaching leadership style
builds a positive climate, delegates responsibility, and is skillful in issuing challenges
social responsibility
business ethics embodies standards, norms, and expectations that reflect a concern of major stakeholders, including consumers, employees, shareholders, suppliers, competitors, and the community
corporate citizenship
used to express the extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by their various stakeholders
Affiliative Leadership
values people and relies on friendship and trust to promote flexibility and innovation
World Trade Organization (WTO)
was established in 1995 at the Uruguay round of negotiations of the General Agreement on Tariffs and Trade (GATT). Today, the WTO has 133 member nations and an additional 33 nations that have applied for membership and hold observer status. On behalf of its membership, the WTO administers its own trade agreements, facilitates future trade negotiations, settles trade disputes, and monitors the trade policies of member nations
price gouging
when prices increase beyond the level needed to meet the costs of these additional expenses, an ethical issue emerges
Ethical Leaders
* Have strong personal character *Have a passion to do right *are proactive *Consider the stakeholders interest *are role models for the organization's values *are transparent and actively involved in organizational decision making *are competent managers who take a holistic
How Companies Might Address Discrimination Issues
*Develop a company policy on discrimination *Communicate the policy internally and externally *Determine benchmarks for activities in which discrimination can arise *Determine indicators of possible noncompliance *Establish methods for identifying noncompliance *Develop a plan and implement the plan
Advancing human rights includes the following principles:
*Engage in an open dialog with workers and management. *Be aware of human rights issues and concerns in each country in which the company engages in business. *Adopt the prevailing legal standard but seek to embrace a "best practices" approach and standard
Common Mistakes in Designing and Implementing an Ethics Program
1 Not having a clear understanding of the goals of the program from the beginning 2 Not setting realistic and measurable program objectives 3 Senior management's failure to take ownership of the ethics program 4 Developing program materials that do not address the needs of the average employee 5 Transferring a domestic program internationally 6 Designing a program as a series of lectures
Minimum Requirements for Ethical Compliance Programs
1)Standards and procedures, such as code of ethics, that are reasonably capable of detecting and preventing misconduct 2 High-level personnel who are responsible for an ethics and compliance program 3 No substantial discretionary authority given to individuals with a propensity for misconduct 4 Standards and procedures communicated effectively via ethics training programs 5 Establishment of systems to monitor, audit, and report misconduct 6 Consistent enforcement of standards, codes, and punishment 7 Continuous improvement of the ethical compliance program
Ethical Issue Intensity
The intensity of an ethical issue relates to its perceived importance to the decision-maker. Ethical issue intensity, then, can be defined as the relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization. Research suggests that individuals are subject to six "spheres of influence" when confronted with ethical choices: the workplace, family, religion, legal system, community, and profession.
corporate governance
To remove the opportunity for employees to make unethical decisions, most companies have developed formal systems of accountability, oversight, and control
Harmful Products
Governments in advanced industrialized nations have banned the sale of certain products that are considered harmful. However, some companies in those nations continue to sell those products in other countries where they remain legal. Some products that are not harmful in some countries may be so in others because of issues related to literacy, unsanitary conditions, and cultural values.
Ethics officers
High-ranking persons known to respect legal and ethical standards that have oversight on organizational ethics programs are known as _______________