Business Ethics Test 1 (Chapter 1-3)

Reputation

One of a corporation's greatest intangible assets with a tangible value.

Active Bribery

Refers to the person offering the money to gain an advantage.

Physical Hacking

Requires the hacker to enter a facility physically and find a vacant unsecured workstation with an employee's login and password

Shoulder Surfing

Someone simply looks over an employee's shoulder while he or she types a password.

Honesty

to tell the truth to the best of your knowledge.

Ethical Culture

Acceptable behavior as defined by the company and industry.

Fairness

being just, equitable and impartial.

Principles

Specific and pervasive boundaries for behavior that should not be violated.

Whacking

Using wireless hacking to break into a network

Labeling Issue

has to do with labeling on packages that are not true.

Equality

the distribution of benefits and resources.

Bribery

the practice of offering something in order to gan an illicit advantage from someone in authority.

Marketing Fraud

the process of dishonestly creating, distributing, promoting and pricing products.

Sexual Harassment

the repeated unwanted behavior of a sexual nature perpetrated upon one individual by another.

6 Steps to Implement a Stakeholder Perspective

1.Assessing the Corporate Culture 2.Identifying Stakeholder Groups 3.Identifying Stakeholder Issues 4.Assessing Organizational Commitment to Stakeholders and Social Responsibility 5.Identifying Resources and Determining Urgency 6.Gaining Stakeholder Feedback

4 Steps of Social Responsibility/Corporate Citizenship

1.Economic: Maximizing stakeholder wealth and/or value 2.Legal: abiding by all laws and government regulations 3.Ethical: following standards of acceptable behavior as judged by stakeholders 4.Philanthropic: "giving back" to society

3 Components of Corporate Governance

1.Preventing and detecting misconduct 2.Investigating and disciplining 3.Recovery and continuous improvement

Federal Sentencing Guidelines for Organization

Codified into law some incentives that to reward organizations for taking action to prevent misconduct such as developing effective internal legal and ethical compliance programs.

Lying

Commision Lying: Creating a perception or belief by words that intentionally deceives the receiver of the message. Omission Lying: intentionally not informing others of an differences, problems, safety warnings, or negative issues relating to the product or company that significantly affects awareness, intention, or behavior.

Passive Bribery

Committed by the person receiving the bribe.

Dodd-Frank Wall Street Reform and Consumer Protection Act

Complex law that required regulators to create hundreds of rules to promote financial stability, improve accountability and transparency, and protect consumers from abusive financial practices.

Business Ethics

Compromises 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.

Stakeholder Interaction Model

Conceptualization of the relationship between businesses and stakeholders.

Stakeholder

Customers, 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.

Stakeholder Orientation

Degree to which a firm understands and addresses stakeholder demands.

Objective of Dodd Frank Wall Street Reform and Consumer Protection Act:

Designed to make the financial services industry more ethical and responsible. Complex law that required regulators to create hundreds of rules to promote financial stability, improve accountability and transparency, and protect consumers from abusive financial practices.

Defense Industry Initiative on Business Ethics and Conduct

Developed to guide corporate support for ethical conduct.

Dumpster Diving

Digging through trash to find trade secrets.

Secondary Stakeholder

Do not typically engage directly in transactions with a company and therefore are not essential to survival.

Values

Enduring beliefs and ideals that are socially enforced.

Remote Hacking

Involves attempting to remotely penetrates a system across the internet.

Corporate Governance

Involves the development of formal systems of accountability, oversight, and control. Removes opportunities for employees to make unethical decisions.

Intellectual Property Rights

Involves the legal protection of intellectual property such as music, books, and movies.

Privacy Issues

Issues pertaining to ones own privacy. Including monitoring

Sarbanes-Oxley Act

Law that made securities fraud a criminal offense and stiffened penalties for corporate fraud.

Approaches to Stakeholder Theory

Normative: Identifies ethical guidelines that dictate how firms should treat stakeholders. Stakeholders have legitimacy and have the right to engage organizations. Descriptive: Actual behavior of the firm. Addresses how decisions and strategies are made for stakeholder relationships. Instrumental: Examines relationships involved in the management of stakeholders including the processes, structures, and practices that implement stakeholder relationships with organizations.

Objectives of Federal Sentencing Guidelines for Organizations

Prevent and detect business misconduct in cooperation with government regulation. Codified into law incentives to reward organizations for taking action to prevent misconduct.

Morals

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

Objectives of Sarbanes-Oxley Act

Sarbanes-Oxley Act: Made securities fraud a criminal offense and stiffened penalties for a corporate fraud. Created an accounting oversight board that requires corps to establish code of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interested parties. Requires top executives to sign off on their financial reports and disclose stock sales immediately. Prohibit companies from giving loans to top managers.

Equal Employment Opportunity Commission

US companies can be sued if it: 1. Refuses to hire an individual 2. Maintains a system of employment that unreasonably exclueds an individual from employment 3. discharges an individual 4. discriminates against an individual with respect to hiring, employment terms, promotion, or privileges of employment as they relate to the definition of discrimination.

Integrity

Uncompromising adherence to a set or group of values

Phone Eavesdropping

Using digital recording device to monitor the record a fax line.

Password Guessing

When an employee is able to guess a person's password after finding out personal information about him or her.

Dual Relationship

a personal loving and or sexual relationship with someone with whom you share professional responsibilities.

Ethical Issue

a problem situation or opportunity that requires an individual, group, or organization to choose among several actions that must be evaluated as right or wrong.

Ethical Dilemma

a problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that have negative outcomes.

Fraud

any purposeful communication that deceives manipulates or conceals facts in order to harm others.

System Hacking

assumes the attacker already has access to a low level, privileged-user account.

Puffery

exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely upon and is not actionable under the lanham act.

Affirmative Action Programe

involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender or other characteristics

Reciprocity

is an interchange of giving and recieving in a social relationship.

Corporate Intelligence

is the collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends.

Abusive or Intimidating Behavior

physical threats, false accusations, being annoying, profanity, insults, yelling, harshness.

Age Discrimination in Employment Act

specifically outlaws hiring practices discriminating against individuals on the basis of age. Specifically 40years old or older.

Literally False

tests prove: establishment claims that are false bald assertions: establishment makes a claim that cannot be substantiated

Corporate Citizenship

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

Implied Falsity

the message has a tendency to mislead, confuse, or deceive the public.

Optimization

trade off between equality and efficiency.

Conflict of Interest

when an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group.

Consumer Fraud

when consumers attempt to deceive businesses for their own gain.

Hacking

Breaking into a computer network to steal information

Executive Compensation

The number of shares/compensation top executives are paid for their leadership roles.

4 Ways an Organization's Strong Commitment to Ethical Practices Benefits the Organization

1) Ethics Contributes to Employee Commitment -The more an organization takes care of its employees, the more likely the employees will take care of the organization. -An ethics and compliance program can support values and appropriate conduct. -shared trust promotes teamwork 2) Ethics Contribute to Investor Loyalty -Investors are concerned about the ethical reputation of the company they are investing in. -ethical culture provides a foundation for efficiency, productivity, and profits. -Socially responsible behavior is viewed more as a requirement than an option for companies 3) Ethics Contribute to Customer Satisfaction -Customer satisfaction is one of the most important factors in a successful business strategy. Create a relationship. -High levels of perceived corporate misconduct decreases costumer trust. - Trust is key to keep a long term relationship with customers. -When an organization has a strong ethical environment, it usually focuses on the core value of placing customer's interests first. 4) Ethics Contribute to Profits -Investors see risk in firms without an ethical culture -companies perceived by their employees as having a high degree of honesty and integrity have a much average total return to shareholders than companies perceived with low honesty and integrity. -corporate concern for ethical conduct is now part of strategic planning to maximize profitability.

3 Components of the Three Foundational Values to Identify Ethical Issues

1. Integrity a. relates to product quality, open communication, transparency, and relationships. 2. Honesty 3. Fairness a. Equality b. Reciprocity c. Optimization

4 Parts of Consumer Bill of Rights

1. The right to safety 2. The right to be informed 3. The right to choose. 4.The right to be heard.

5 Periods that Business Ethics has Transcended JFK's "Consumer Bill of Rights"

1960s: Environmental Issues, Civil Rights Issues, Increased employee-employer tension, changing work ethic, rising drug abuse. 1970s: Employee militancy, human rights issues, covering up rather than correcting issues, disadvantaged consumers, transparency issues. 1980s: Bribes and illegal contracting practices, influence peddling, deceptive advertising, financial fraud. 1990s: Sweatshops and unsafe working conditions in third world countries, rising corporate liability for personal damages (cigarettes), financial mismanagement and fraud, organizational ethical misconduct. 2000s: Cybercrime, financial misconduct, global misconduct, global issues including Chinese product safety, sustainability, intellectual property theft.

Stakeholder Model of Corporate Governance

Adopts a broader view of the purpose of business. The company must show responsibility not only to the stockholders but also to its other stakeholders such as employees and others that are directly or indirectly involved.

Corporate Social Responsibility

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

Consumer Bill of Rights

Four basic consumer rights; 1.The right to safety 2.The right to be informed 3.The right to choose 4. The right to be heard.

Accounting Fraud

Fraud involving the corporation's financial reports.

Shareholder Model of Corporate Governance

Goal is maximizing wealth for investors and owners. Shareholder orientation serves the best interests of the investors.

Insider Trading

Illegal Trading: the buying and selling of stocks by insiders who possess information that is not yet public. Legal Trading: buying of selling of ones own stocks.

Interlocking Directorate

The concept of board members being linked to more than one company.

Hostile Work Environment

The conduct was unwelcome. The conduct was severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment. The conduct was such a reasonable person would find it hostile or offensive.

Facilitation Payment

The practice of offering something to facilitate a quicker passage or process.

Primary Stakeholder

Those whose continued association and resources are absolutely necessary for a firm's survival.

Social Engineering

Tracking individuals into revealing their passwords or other valuable corporate information.

Discrimination

Treating someone different because of their race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status.