Business Ethics Chapter 1: William Boyd

What are the Consumer Bill of Rights & what president voiced them?

Right to Safety Right to be Informed Right to Choose Right to be Heard JFK

What is ethical culture?

acceptable behavior as defined by the company and industry

What is workplace integrity?

pressure to compromise organizational standards in observed misconduct, reporting of misconduct when observed, and retaliation against reports

What is corporate social responsibility?

An organization's obligation to maximize its positive impact and minimize its negative impact on society

1990's: Institutionalization of Business Ethics

-President Bill Clinton: Continued to support self-regulation and free trade -Deregulated banking laws of 1930's which later led to the near financial collapse and "Great" Recession of 2008 -Government action with health-related social issues such as teenage smoking -FSGO: set tone for organizational ethical compliance programs (1991-first federal law focused on Business Ethics and publicly traded companies

What is the Business Ethics timeline?

1950s-60s-started as a Theological Discussion 1960s-70s- Recognition of Social Issues Now: Field of Study

What is the Regan-Bush Era Policy?

Industry Self-regulation rather than regulation by government was in the public interest's

What is the Dodd-Frank Act?

Wall Street Reform & Consumer Protection Act: addressed some of the issues related to the financial crisis and recession and designed to make the financial services industry more ethical and responsible --APPLYS ONLY TO BANK

What are morals?

a person's personal philosophies about what is right or wrong

What is a moral dilemma?

a situation where the person is faced with multiple choices, all of which are undesirable as defined by the person

What are business ethics?

comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or form the legal system that primarily guide individual and group behavior in business

What are values?

enduring beliefs and ideals that are socially enforced

What is the Defense Industry Initiative on Business Ethics Conduct?

i. Codes of conduct must be understandable ii. Member companies expected to provide ethics training and support for employees iii. Defense contractors must create an open atmosphere in which employees feel comfortable reporting violations without fear of retribution iv. Companies must perform extensive internal audits and develop effective internal reporting and voluntary disclosure plans v. Member companies must preserve the integrity of the defense industry vi. Member companies must adopt a philosophy of public accountability

What is a value dilemma?

individual's beliefs are grounded in societal norms

What are principles?

specific and pervasive boundaries for behavior that should not be violated

What is Sarbanes-Oxley Act?

the most far-reaching change in organizational control and accounting regulations since the Securities & Exchange Act of 1934 --made securities fraud a criminal offense and stiffened penalties for corporate fraud --APPLYS ONLY TO PUBLIC COMPANY

What is global compact?

to create openness and alignment among business, government, society, labor, and the United Nation

21st Century of Business Ethics

-President George W. Bush: Misconduct at Enron, WorldCom, Halliburton, and the accounting firm Arthur Andersen caused the government and the public to look for new ways to encourage ethics behavior -2002:Congress passed Sarbanes-Oxley Act (most far reaching change in organizational control and accounting regulations -Amendments to FSGO: required governing authority be well informed about its ethics program with respect to content, implementation, and effectiveness. (placed responsibility on firms's leadership) -Sarbanes-Oxley Act & FSGO institutionalized the need to discover and address ethical and legal risk -Dodd-Frank Wall Street Reform & Consumer Protection Act addressed some of the issues related to the financial crisis recession -Donald Trump: decreased environmental & financial regulations (questioned sustainably)

What is the Federal Sentencing Guidelines for Organizations?

-first real law approved by Congress in November of 1991, set the tone for organizational ethical compliance programs in 1990s

What is the Defense Industry Initiative on Business Ethics and Conduct?

-first set of guidelines: developed to guide corporate support for ethical conduct, effort established a method for discussing practices and working tactics to link organizational practice & policy to successful ethical compliance -6 Principles

How does ethics contribute to profits?

1. Better business performance 2. Part of strategic planning toward obtaining the outcome of higher profitability

How does ethics contribute to consumer satisfaction?

1. High levels of perceived corporate misconduct decrease customer trust 2. Companies viewed as socially responsible increase customer trust and satisfaction 3. Consumer respondents stated they will pay more for products from companies that give back society

How does Ethics contribute to investor loyalty?

1. Provides a foundation for efficiency, productivity, and profits 2. Demands for socially responsible investing is increasing

How does ethics contribute to employee commitment?

1. Willingness to sacrifice 2. Increases group creativity and job satisfaction; decreases turnover 3. There is greater absence misconduct

Business Ethics Timeline: 1970s

Business Ethics as an Emerging Field -business ethics becomes a common expression -researchers seek to identify ethical issues and describe how business people might choose to act in particular situations -ethical issues defined: bribery, deceptive, advertising, price collusion, product safety, and ecology -limited success was made to describe how the ethical decision--making process in business worked and to identify the many variables that influenced the process

Business Ethics Timeline: 1980s

Business Ethics reaches Maturity -center's for business ethics provided publications, courses, conferences, and seminars -Stakeholder theory developed -Defense Industry Initiative on Business Ethics Conduct was developed to guide corporate support for ethical conduct (First attempt of an industry to regulate itself -Reagan-Bush Era Policy

Business Ethics Timeline: 1960s

The Rise of Social Issues in Business -development of anti-business trend -decay of inner cities; growth of ecological problems -JFK Consumer Bill of Right's -President Lyndon Johnson: The Great Society (extend national capitalism with the U.S. government's responsibility to provide all citizens with some degree of economic stability, equality, and social justice