Business Ethics Chapter 1 & 2 Review

discuss 1 corporate governance issue, why it is defined as an issue, and how you would solve it.

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why is it important that business people study business ethics?

Business ethics are a reflection of the standard of business that either an individual or business uses when conducting transactions. Business ethics are important because they add a line of defense to protect the company, enable company growth, save money and allow people to avoid certain legal implications.

FSGO federal sentencing guidelines for organizations

codified into law, incentives to reward organizations for taking action to prevent misconduct.

stakeholder model of corporate governance

entails creating governance systems that consider stakholder welfare in tandem with corporate needs and interests

corporate governance

formal systems of accountability, oversight, and control within an organization

executive compensation

means by which executives are rewarded for their leadership, organizational service, and performance

reputation

one of an organization's greatest intangible assests with tangible value; influenced by its actions, choices, behaviors, and consequences

Principles

specific pervasive boundaries for behavior that are universal and absolute.

Ethical culture

the character or decision-making process that employees use to determine whether their responses to ethical issues are right or wrong

corporate citizenship

the extent to which businesses strategically meet the economic, legal, and philanthropic responsibilities placed on them by their various stakeholders.

discuss the difference between promary and secondary stakeholders in the stakeholder interaction model and give examples of each type.

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we all learn values from sources such as family, religion, and school. why might these sources of individual values not prove very helpful when making complex business decisions?

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what methods do special interest groups use to force organizations to alter their products or change their practices?

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why do you think ethical misconduct is more prevalent in today's business world?

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why is ethical misconduct more difficult to overcome than poor financial performance?

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how does ethics contribute to employee commitment?

Despite the increasing significance of corporate ethics, few studies have explored the intermediate mechanisms that explain the relationship between corporate ethics and firm financial performance. Drawing on institutional theory and strategic human resource management literature, the authors hypothesize that the internal collective processes based on employees' collective organizational commitment and organizational citizenship behavior (OCB) mediate the ethics-performance relationship at the organizational level. The authors' hypotheses are tested using data collected from 3,821 employees from 130 Korean companies and the respective companies' financial performance data. The results indicate that collective organizational commitment and interpersonal OCB are meaningful intervening processes that connect corporate ethics to firm financial performance. To complement prior studies that identify a firm's reputation and external relations as mediators between corporate ethics and performance, the present study highlights the need to examine microprocesses occurring within the organization to account for the ethics-firm performance relationship. Moreover, the present demonstration of collective organizational commitment and OCB as meaningful predictors of a firm's objective performance indicates the significance of these employee processes in explaining organizational-level outcomes.

how do ethics contribute to customer satisfaction?

In small-businesses ethics refers to standards of correct behavior -- often established by the owner of the business -- that members of the organization are expected to maintain when dealing with each other, customers, vendors and the community as a whole. One of the benefits of maintaining high ethical standards is increased customer satisfaction which can lead to repeat business from the customer and valuable word-of-mouth endorsements of your company to other potential customers.

what is corporate citizenship?

The extent to which businesses are socially responsible for meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim is for businesses to create higher standards of living and quality of life in the communities in which they operate, while still preserving profitability for stakeholders.

social responsibility

an organizations obligation to maximize its positive impact on stakeholders and to minimize its negative impact.

corporate governance

business ethics that embody values, norms, and expectations that reflect a concern of major stakeholders, including consumers, employees, shareholders, suppliers, competitors, and the community

sarbanes oxley act

law athat made securities fraud a criminal offense and stiffened penalties for corporate fraud; created an accounting oversight board that requires corporations to establish codes of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interested parties.

stakeholder orientation

the degree to which a firm understands and addresses stakeholder demands

business ethics

the principles, values, and standards that guide behavior in the world of business.

stakeholder interaction model

a conceptualization of the relationship between businesses and stakeholders featuring two-way relationships between the firm and a host of stakeholders

Caux Round Table

a group of busniesses, political leaders, and concerned interest groups that desire responsible behavior in the global economy

social responsibility

customers, investors, shareholders, employees, suppliers, government agencies, communities, and many others who have a stake or claim in some aspect of a company's products, operations, markets, industry, and outcomes

Defense industry intiative on business ethics and conduct

established a method of discussing best practices and working tactics to link organizational practice and policy to successful ethical compliance.

shareholder model of

focuses on developing and improving the formal system for maintaining performance accountability between top management and the firms shareholders.

secondary stakeholder

individuals or groups that do not typically engage in transactions with a company and thus are not essential for its survival, including the media, trade associations, and special interest groups

primary stakeholder

individuals or groups whose continued association is absolutely necessary for a firm's survival, including employees, customers, investors, and shareholders, as well as the governments and communities that provide necessary infrastructure

Consumers Bill of Rights

introduced in 1962, outlined four basic consumer rights: the right to safety, the right to be informed, the right to choose, and the right to be heard