Chpt. 4: Business Ethics & Corporate Social Responsibility

What is identity theft & what responsibilities do businesses have to prevent it?

Identity theft is where a person's personal information gets stolen & someone uses it to take out loans or commits other acts of fraud. Companies frequently collect this kind of information & any company that does has an ethical obligation to keep it safe & secure.

What is discrimination?

In a social & economic sense, denial of opportunities to individuals on the basis of some characteristic that has no bearing on their ability to perform in a job.

What are nongovernmental organizations (NGOs)?

Nonprofit groups that provide charitable services or promote social & environmental causes

What is sustainable development?

Operating business in a manner that minimizes pollution & resource depletion, ensuring that future generations will have vital resources

What are conflicts of interest?

Situations in which competing loyalties can lead to ethical lapses, such as when a business decision may be influenced by the potential for personal gain.

What is strategic CSR?

Social contributions that are directly aligned with a company's overall business strategy

Why can't legal considerations resolve every ethical question?

States have different business laws & therefore can't be used. Also international businesses may encounter different laws in different countries. There are a lot of gray areas in ethical decisions that can be argued for multiple ways if someone were trying to use legal resources to solve it.

What is whistle-blowing?

The disclosure of information by a company insider that exposes illegal or unethical behavior by others within the organization

What is philanthropy?

The donation of money, time, goods, or services to charitable, humanitarian, or educational institutions

What is corporate social responsiblility (CSR)?

The idea that business has obligations to society beyond the pursuit of profits

What is ethics?

The rules or standards governing the conduct of a person or group

What is insider trading?

The use of unpublicized information that an individual gains from the course of his or her job to benefit from fluctuations in the stock market.

How are businesses responding to the environmental issues facing society?

They can take responsibility for their consumption and reduce energy in its data centers or repurpose old equipment/products, install energy saving technology, and even running public awareness campaigns.

How do individuals employ philosophical principles in making ethical business decisions? Why is it important for a company to balance its social responsibility efforts with its need to generate profits?

They must consider the rights of everyone else in the problem & be as objective as possible. They have to put emotions to the side & figure out a fair, ethical decision. It's important to balance it's CSR efforts with its need to generate a profit because consumers will be willing to pay a bit more for a product that is more eco-friendly or that sends some of its profit to a third world country to help the poor.

What is ethical behavior?

1) Competing fairly & honestly 2) Communicating truthfully 3) Being transparent 4) Not causing harm to others

What are factors that influence ethical behavior?

1) Cultural differences 2) Knowledge 3) Organizational behavior

What are steps to help find the right answer when you're faced with an ethical dilemma?

1) Make sure you frame the situation accurately 2) Identify all parties who might be affected by the decision & consider the rights of everyone involved 3) Be as objective as possible 4) Don't assume that other people think the way you do 5) Watch out for conflicts of interest

What are different perspectives on corporate social responsibility?

1) Minimalist CSR 2) Cynical CSR 3) Defensive CSR 4) Proactive CSR

What rights do consumers have?

1) the right to buy safe products & to buy them safely 2) the right to be informed 3) the right to choose which products to buy 4) the right to be heard

What is identity theft?

A crime in which thieves steal personal information & use it to take out loans & commit other types of fraud

What is consumerism?

A movement that pressures businesses to consider consumer needs & interests

What is an ethical lapse?

A situation in which an individual or a group makes a decision that is morally wrong, illegal, or unethical

What is an ethical dilemma?

A situation in which more than one side of an issue can be supported with valid arguments

What are cap & trade programs?

A type of environmental policy that gives companies some freedom in addressing the environmental impact of specified pollutants, by either reducing emissions to meet a designated cap or buying allowances to offset excess emissions

What is a code of ethics?

A written statement that sets forth the principles that guide an organization's decisions

What is affirmative action?

Activities undertaken by businesses to recruit & promote members of groups whose economic progress has been hindered through either legal barriers or established practices

What is minimalist CSR?

Companies do not have social responsibilities beyond earning money & obeying the law

What is defensive CSR?

Companies engage in CSR only after being shamed or forced into it; giving money to causes unrelated to the company's line of business

What is proactive CSR?

Companies have a responsibility to help society beyond simply paying taxes & obeying the law; giving money to causes unrelated to the company's line of business; investing in areas that are aligned with the company's business mission

What is cynical CSR?

Companies use CSR as a marketing ploy to distract attention from their self-centered behavior; giving money to causes unrelated to the company's line of business

What is the difference between defensive & proactive CSR?

Defensive CSR is used when companies are shamed/guilted into doing work. Proactive CSR is used when companies want to do the work & their work is invested in areas that are aligned with their business mission

How does ethics differ from corporate social responsibility?

Ethics guides one person or one group. Corporate social responsibility is an idea that a business has obligations to society that go beyond making profits.