Ethics Study Terms CHP 1-4
Shareholder model of corporate governance
-Maximizing wealth for investors and owners -focuses on developing and improving the formal system for maintaining performance accountability between top management and the firms shareholders -drives a firms decisions toward serving the best interest of investors
Implementing Stakeholder Perspective
1. Assessing the corporate culture 2. Identifying stakeholder groups 3. Identifying stakeholder issues 4. Assessing organizational commitment to social responsibility 5. Identifying resources and determining urgency 6. Gaining stakeholder feedback
Reputation
An idea held by the public about something or someone
Social Responsibility
An organization's obligation to maximize its positive impact and minimize its negative impact on society
Principles
Basic beliefs, rules, or laws
This is a leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases.
Better Business Bureau
_____ is the offering of something of value in order to gain an illicit advantage.
Bribery
_____ law defines the rights and duties of individuals and organizations (including businesses).
Civil
Which of the following is a major ethical concern among corporate boards of directors?
Compensation
Business Ethics
Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
What type of fraud involves intentional deception on the part of an individual or group in order to derive an unfair economic advantage over an organization?
Consumer
_____ focus(es) on developing sound organizational practices and integrity for financial and nonfinancial performance measures, rather than on an individual's morals.
Core practices
_____ law not only prohibits specific actions in business such as fraud, theft, or securities trading violations, but also imposes fines or imprisonment as punishment for breaking the law.
Criminal
Which of the following are not typically secondary stakeholders?
Customers
____________ must be trusted to make business work properly and includes accountants.
Gatekeepers
Investors
Groups of individuals who invest their money in various types of companies in search of making a profit
Which of the following is not a side-effect of being the victim of workplace bullying?
Increased productivity
Concerns involving copyright infringement on books, movies and music, and other illegally produced goods relate to which type of ethical issue?
Intellectual property rights
Investor Loyalty
Investors are aware of the contributions of ethical conduct in providing a foundation for efficiency, productivity, and profits in a firm
The term business ethics is best described by the following statement:
It comprises the principles, values, and standards that guide behavior in the world of business.
Abusive or intimidating behavior is the most common ethical problem for employees. Which of the following is not related to this concept?
Performance probation
_____ is the synergistic and mutually beneficial use of an organization's core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits.
Strategic philanthropy
Profit
The financial gain made in a transaction
Why is the public more tolerant of consumer misconduct than business misconduct?
There are big differences in wealth and success between businesses and consumers.
Why is it important for businesses to recognize secondary stakeholder groups?
They have legitimacy and can exert power.
Which of the following are not typically primary stakeholders?
Trade associations
_____ responsibilities relate to a business's contributions to stakeholders.
Voluntary
How do violations of the law usually start?
When businesspeople stretch the limits of ethical standards
Corporate Social Responsibility
a business's concern for society's welfare
Executive compensation
a governance mechanism that seeks to align the interests of managers and owners through salaries, bonuses, and long-term incentives such as stock awards and options
Board of Directors
a group of persons elected by the stockholders to manage a corporation
The degree to which a firm understands and addresses stakeholder demands can be referred to as
a stakeholder orientation.
Optimization is defined as
a trade-off between equity and efficiency.
Stakeholders' power over businesses stems from their
ability to withdraw or withhold resources.
Ethical Culture
acceptable behavior as defined by the company and industry
Ethical culture is defined as
acceptable behavior as defined by the company and industry.
Conflicts of interest exist when employees must choose whether to
advance their own personal interests, those of the organization, or those of some other group.
Primary stakeholder
any group on which an organization relies for its long-term survival. May include customers, employees, stockholders, creditors, suppliers, or anyone else with a functional or financial interest in the product or situation.
Business ethics is a part of decision making
at all levels of work and management.
The term used to express how a firm meets its stakeholder expectations of its economic, legal, ethical, and philanthropic responsibilities is
corporate citizenship.
Employee Commitment
development of an ethical culture leads to employee retention and loyalty, which increases employee performance
Which of the following describes the four levels of social responsibility?
economic, legal, ethical, and philanthropic
Values are
enduring beliefs and ideals that are socially enforced.
Issues related to fairness and honesty may arise because business is sometimes regarded as a
game governed by its own rules rather than those of society.
Secondary stakeholder
have an indirect relationship with a company. They tend to not be employees or directors and don't have any direct engagement with a company, but can still be influential.
The _____ of ethics involves embedding values, norms, and artifacts in organizations, industries, and society
institutionalization
Investors are concerned about business ethics because they know that misconduct can
lower stock value and prices.
The purpose of a stakeholder orientation is to
maximize positive outcomes that meet stakeholder needs.
Compensation
payment for working
When a commercial states that a product is superior to any other on the market, the marketer risks accusations of
puffery.
Morals...
relate to you and you alone.
Ethical Climate
represents employees' perceptions about the extent to which work environments support ethical behavior
An ethical issue is a problem, situation, or opportunity
requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical.
Many people wrongly assume that a company will be ethical if it
simply hires ethical employees
Principles are
specific and pervasive boundaries for behavior that are universal and absolute.
Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as
stakeholders.
The study of business ethics is important to better understand all of the following except
that business ethics is entirely an extension of an individual's own personal ethics.
Customer Satisfaction
the extent to which a product's perceived performance matches a buyer's expectations
Corporate citizenship
the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders
Values
the ideas, beliefs, and attitudes about what is important that help guide the way you live
Social Responsibility
the obligation of a business to contribute to society
Ethics
the principles of right and wrong that guide an individual in making decisions
Corporate governance
the system of governing a company so that the interests of corporate owners and other stakeholders are protected
Donation of computer equipment to schools by Toshiba would be associated with _____ responsibilities.
voluntary