Ethic exam 2

Assess the role of the International Monetary Fund in business ethics: Define IMF? Who is in IMF? What do IMF do?

-A organization that created by Bretton Woods agreement in 1944 to manage currencies. -190 countries -Make short-term loans, and provide foreign currencies. Promote responsible business conduct and recommended new rules.

3 keys figures in modern economics What do both Keynes and Friedman agreed?

-Adam smith: Laissez-fair capitalism -John Maynard Keynes: government can stimulate the private sector. -Milton Friedman: Return to self-regulating free market system. -Firms only seek to maximize profit, and people are preference among outcomes that associate with value. People act independently on the basis of full information.

Examine global environmental issues related to the atmosphere, water, and land -Atmospheric issues -Water issues -Land issues

-Air pollution from mobile, stationary, and natural (volcanic). Acid rain is also an issue. -Water pollution from human and wildlife, and some countries worried about water quantity. -Land pollution from human waste, mining, and forest conservation.

Determine how leadership, power, and motivation relate to ethical decision making in organizations (what is an effective leader, what does it mean when someone has power, what does power do?, what started motivation?)

-An effective leader is the one who are good at getting followers to common goals. -An individual has power when his/her presence cause someone to behave differently. -Power influence and shape corporate culture. -An individual's needs may influence motivation.

Assess the role of the World Trade Organization in business ethics Define WTO? Who is in WTO? What do they do?

-An organization established in 1995 to administers trade polies and agreement. -159 members -Provide legally binding and addresses economic issues.

Assess the role of the United Nations Global Compact in business ethics -Define UN -Who is in UN? -What do UN do? -What is UNGC?

-An organization founded in 1945 to promote peace, international relation, and human rights. -193 countries -Focuses on environmental and human rights issues. -10 principles that promote human right, sustainability, labor, and against corruption.

4 organizational culture type:

-Apathetic: minimal concern for people or performance -Caring: high concern for people, less for performance -Exacting: minimal concern for people, high on performance. -Integrative: high concern for people and performance.

Identify the benefits and limitations of ethics auditing

-Benefit: +Detect misconduct before it become worse and improve legal compliance +Improve organization performance and relationship with stakeholders +Set goal to measure performance. -Limitation: +may reveal problem that can't be solve and the company does not wish to reveal. +stakeholder might dissatisfied with the result +Required financial and record resources +No guarantee that auditing is the solution +Lack of standardization.

Discuss the relationship between individual and group ethical decision making: How are ethical decision are often made? What increase potential for ethical decisions? What does individual need to understand how to resolve ethical issues?

-By committees, formal, and informal groups. -Congruence between individual and organizational ethics. -Individual need experience to understand how to resolve ethical issues.

Compliance vs. values orientation. Statement of values

-Compliance: employees must identify misconduct and use legal terms to tech the rules and penalties for noncompliance. -Value orientation: strives to develop shared values, focus on accountability and commitment. -serves the general public and addresses stakeholder interests.

Compliance-based culture vs. value-based cultures: What did they use to create code of ethic? What is their focus? What is the disadvantage?

-Compliance: use law and and regulation to create code of ethic. Focus on risk management. Lack of long-term focus and integrity. -Value: use values and mission of the firm to create code of ethic. Focus on values. Employees well-being might be neglect.

What 5 factor can impact success of ethics?

-Content, frequency, and quality of the code of ethic. Senior and local management ability to incorporate ethic into the organization.

Understand the concept of corporate culture Culture is codified by? What is included? What does it do?

-Corporate culture ate the set of value of in solving problems and a shared belief of top managers. -Sarbanes-Oxley 404 compliance section -includes assessment of controls by mangers and auditors. -force firm to adopt a set of values to create cooperate culture.

Understand the responsibility of the corporation to be a moral agent

-Corporate have the same rights and responsibilities as individuals, they must obey laws and define acceptable business conduct. Corporate culture without values and communication can facilitate individual misconduct. -Implementing a corporates ethics program promotes the corporations as a moral agent.

Examine leader-follower relationships in communication 4 categories of ethical communication:

-Create transparency by encouraging discussions of ethics (reporting can be formal or informal) 1/ interpersonal communication: when 2 or more people interact with one another. 2/ small group 3/ nonverbal communication: communication expressed through actions, body language, expressions, or other forms of communication. (not written or oral) 4/ listening: paying attention to both verbal and nonverbal behavior.

Understand the strategic role of the ethics audit How often should auditing be conduct?

-Demonstrate the positive impact of ethical conduct and social responsibility on the firm's bottom line. -Conduct regularly.

Gain awareness of global ethical issues: Dumping International risk Bribery Antitrust activity Internet security and privacy Human rights Health care Labor, and right to work Compensation Consumerism

-Dumping: charging high prices for domestic market whole selling with low price in foreign market. -Nationalism and risk for international investors. -paying foreign officials for unfair advantages. -Encourage fair competition -Human rights: slavery, world peace. -Wages must meet worker's basic need

Understand the role of capitalism and economics as factors in business ethics What factors can affect global ethical decision making environment? What is risk compartmentalization? is it part of capitalism?

-Economic, political events, and natural disasters. -Occur when organization are unware of the consequences of their decisions. It's part of the capitalism fundamental.

Review environmental legislation related to sustainability -EPA -Goal of the EPA -7 environment legislation and the year they found

-Environmental policy and regulation: agency that accept lawsuits against company that violate environmental laws. 1/Taking action on climate change and improving air quality 2/Protecting America's Water 3/Cleaning up communities and advancing sustainable development 4/ Ensuring the safety of chemicals and preventing pollution 5/Better waste management. -Clean air act (1970), Endangered species act (1973), toxic substances control (1976), Clean water act (1977), pollution prevention act (1990), food quality protection act (1996), energy policy act (2005).

Ways corporate cultures are transmitted to employees 2 dimension of concern in organization culture: cultural audit

-Formal (manual,...) or informal (dress codes, promotion,...) -Concern for people and performance. -assessment of the organization's value.

Explore how the work group influences ethical decisions: 2 types of group What define a standard of behavior?

-Formal groups: an assembly of individuals with an organization structure that accepted by the group. -Informal groups: 2 or more individuals with common interest but without organization structure. -Group norms.

Discuss global values, goals, and business practices within ethics: -Define global business -Country cultural values vs. National cultural

-Global business is the effort to brings together people from varying cultures, values, laws, and ethical standards. -Country cultural values are values that are specific to countries, regions, sects, or group. While national culture mean everything in our surrounding that made by people.

Evaluate business responses to sustainability related to green marketing and greenwashing: -How better environmental performance help firms? -Define green marketing -Greenwashing

-Increase revenue by access to new markets and sale of air pollution technologies. Decrease costs by improve stakeholders relationship and reduce material cost. -Assessment to create good relationship with customers while supporting the natural environment. -Misleading consumers into thinking a product/service is more environmentally friendly than it is.

Define ethics auditing Define social audit

-It's a system to evaluate the effective of an organization's ethic program. -The process of reporting a business's performance in fulfilling its social responsibility expected by stakeholders.

Assess the role of multinational corporations in business ethics Define MCS What do multinational corporation focus on? What is Business for social responsibility (BSR)?

-Multinational corporation are public companies that operate on global scale without significant ties to any one or nation region. -They focus on opportunities throughout the world. -A global system that assist organization to develop ethical tools while track ethical issues and trends.

Most common observed forms of misconduct, from the most common to the least common:

-Personal business on company time, abusive behavior, lying to employees, discrimination, health/safety violations, company resource abuse, and internet abuse.

Understand how employees can be empowered to take on responsibilities in ethical leadership

-Provide ethical leadership training to encourages employees to express concern, bring up ethical issues, and take a proactive approach toward resolving conflicts.

Use the RADAR model to determine how ethical leaders handle misconduct situations: Define RADAR model.

-RADAR model: +Recognize ethical issue +Avoid misconduct +Detect ethical risk areas +Answer stakeholder concerns +Recover from misconduct disaster.

2 school of economics thought

-Rational economics: people always make decision to maximize their benefit. -Behavioral economics: psychological factors can influence people economic decision

Define the Scope of the Audit

-Scope is determined by the type of business, risks faced, and the opportunities to manage ethics.

3 types of social systems:

-Socialism: wealth and power be shared across society. -Social democracy: private ownership of property, but large government. -Bimodal wealth distribution: wealth concentrate at the top and a small middle class, many poor people.

Provide strategic directions for implementation of sustainability Activities and Assignments: -Recycling initiatives -Stakeholder assessment -risk analysis -strategic environmental audit what is TSBPA

-The processing of materials for reuse. -acknowledging and actively monitoring the environmental concern of all stakeholders. -assess the environmental risks associated with the business decisions. -company conduct an audit of their environmental efforts and report results to stakeholders. -Texas State Board of Public Accountancy.

Normative Myopia

-The tendency to ignore, or the lack of the ability to recognize, ethical issues in decision making.

Assess organizational structure and its relationship to business ethics: 2 types of organization structure: Who has the most authorities for them? What organization might that organization structure fit? What is their disadvantage?

-Top-level managers. -Decentralized: lower-management level. This is good for company with skilled employees, and flexible value system. It might encourage misconduct. -Centralized: higher-management level. Good for company that need to make high-risk decision, not skilled employees and process are routines. May have a harder time responding to ethical issues.

Explore and discuss common global business practices Define global common value: 2 types of global common value:

-Values that shared across most cultures, often based on religion or law -Desirable and undesirable common values.

Examine the influence of corporate culture on business ethics: Is the ethical corporate culture significant in ethical decision making? What might encourage to act unethically?

-Yes -If a firm does not monitor unethical behavior.

code of conduct code of ethics

-a specific statement that guides the ethical behavior of a company and its employees -a broad statement that giving employees or members a general idea of what types of behavior and decisions are acceptable.

Define ethical leadership Goal of ethical leadership Impact of leaders on employee's citizenship

-ability to create an ethical culture and motivate others to enforce the organization's norms, policies, and viewpoints. -Positive relationship with citizenship of employees and avoid deviance or misconduct. -Leaders should demonstrate leadership quality to show that they care about them company and encourage employees to follow the company ethics program.

How to improve an ethical system? What is the key in the continuous improvement?

-company may change how it makes a decisions (centralize decisions or decentralize them) -delegate authority carefully.

relatedness needs growth needs

-desires for satisfying interpersonal relationships -satisfied by creative or productive activities.

Understand why businesses need to develop ethics programs

-ethical programs increase ethical awareness. Organization is a competitive environment, which create opportunities for unethical decisions. Top manager must integrate code of ethics into the corporates culture.

Learn about leadership styles and how they influence ethical leadership Define leader-follower congruence Define emotional intelligence 3 leadership styles:

-leaders and followers share the same vision, ethical expectation, and objectives for the company. -ability to manage themselves and their relationship with others effectively. 1/transactional: create employee satisfaction through negotiating for a desired behaviors or performance. 2/ transformational: rise employees' level of commitment and foster trust and motivation. 3/ Authentic: form long-term relationship with employees and other stakeholders by live out corporate values daily in their behavior.

Relate sustainability to ethical decision making and social responsibility: Define sustainability Define corporate social responsibility and why it's so important

-organizations effort in the long-term well-being of natural environment. -Corporate social responsibility is corporation effort in making the world a better place. CSR can be a competitive advantage that allow firms to differentiate themselves and promote their products. CSR also show how companies use their brand identity to create social value, quality and customer loyalty.

Ethical crisis management Ethical crisis management includes?

-plan to recover from disasters that destroy organizational reputation and shareholder confidence. 1/Planning for potential occurrence and contingency. 2/Risk assessment 3/Provide tools to respond.

Define self-reference criterion (SRC) Cultural relativism

-reference to one's own cultural values, experiences, and knowledge. -the concept that morality varies from one culture to another.

Differential association What three acts encourage whistle-blowing?

-the idea that people learn ethical or unethical behavior while interacting with others or their superiors behavior. -Sarbanes-Oxley Act, FSGO, and the Dodd-Frank Act.

Understand the 5 ethical leadership impacts organizational culture

1. Communicate and monitor an organization's values to ensuring that employees are familiar with the company's purpose and beliefs. 2. Motivate ethical behaviors, such as reward 3. Lead to higher employee satisfaction and commitment 4. Strong relationships with external stakeholders. 5. Positive association between ethical commitments of employees and a firm's valuation on the stock market.

Learn about the 5 different styles of conflict management

1. Competing: believe in winning at any cost. 2. Avoid: avoid conflict at any cost 3. Accommodating: cooperative and give in to other side even if it means sacrificing their own interests and values. 4. Compromising: each side give something up in order to gain something of value. 5. Collaborating: leaders collaborate with others to find a creative way to obtain a beneficial solution.

2 ethical leadership approach

1. Compliance based approach: emphasize obedience to rules, regulations, and sets processes in place to ensure compliance. 2. Integrity-based approach: views ethics as an opportunity to implement core values.

Examine 6 requirements for ethical leadership

1. Leaders must model organizational values 2. Put organization interest above their own. 3. Train and develop employees 4. Encourage whistleblowers. 5. Understand employee values and perceptions 6. Recognize the limits of organizational rules and values.

8 goals of ethic training programs

1. identify key risk 2. provide experience in dealing with ethical issues 3. let employees know misconduct are not welcome. 4. let employees know they are responsible for their action. 5. align employee conduct with organization reputation and branding 6. provide feedback for employees 7. allow employees to voice their concern 8. provide a hierarchy of leadership for employees to contact.

5 methods to monitor employees:

1. observe 2. internal audits and investigations 3. surveys 4. reporting systems 5. external audits.

6 Core Values of Code of Ethics

1. trustworthiness 2. respect 3. responsibility 4. fairness 5. caring 6. citizenship

Explore the stages of the ethics-auditing process

1/ review organizational mission, values, goals, and policies. 2/collect and analyze information 3/verify the result of the analysis. 4/report the finding

The 5 processes to controls for ethic programs

1/Proper selection of employees 2/ Ethic training 3/ Structural and communication systems 4/Management's commitment to the program 5/Comparing standards against actual behavior.

Compare renewable energy sources that provide alternatives for sustainability -6 renewable energy sources, their con (if they have any)

1/Wind power 2/Geothermal power: heat from sub-surface of the Earth. Expensive. 3/Solar power: expensive and inefficient 4/Nuclear power: danger of meltdown and waste storage. 5/ Biofuels 6/Hydropower: habitat destruction.

8 roles of ethics officers

1/assess risks and needs 2/develop code 3/conduct training 4/answer questions 5/ensure government compliance 6/monitor ethical conduct 7/take action against code violations 8/review and update code.

5 power bases:

1/reward 2/coercive: power to punish 3/legitimate: right to influence over other 4/expert: power from knowledge and credibility 5/referent: power to take action to achieve the common goal or objective.

List the minimum requirements for an ethics program

1/written codes of conduct 2/ethics officers to oversee the program 3/careful delegation of authority (an ethic officer with clean record) 4/formal ethics training 5/rigorous auditing, monitoring, enforcement, and revision of program standards. 6/consistent enforcement of the above things 7/continuous improvement.

Identify the keys to successful ethics training, including program types and goals What does the program offer?

FSGO -Use assessments to update their internal control mechanisms. -Ethics programs design to address risk -Help firms avoid civil liability if they show due diligence in preventing misconduct.

Examine the challenges of measuring nonfinancial performance

They are not measure based on unit or quantities so it's difficult to analyze and make decision based on them.