Chapter 1 & 2

Ethical Culture

Organizational principles, values, and norms that are adhered to by the company and its personnel

Business Ethics

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

Sustainability

Relates specifically to the environment (air, land, and water)

What does the Stakeholder Framework identify?

The internal and external stakeholders who agree, collaborate, and engage in confrontations on ethical issues; it allows organizations to identify, monitor, and respond to the needs and expectations of stakeholder groups

Business exist because of ...

organizational relationships between employees, customers, shareholders, and the comunity

Other Stakeholders

others who have a "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes are known as stakeholders

Morals

personal philosophies that define right and wrong

Corporate Citizenship

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

3 Approaches to Stakeholder Theory

1. Normative 2. Descriptive 3. Instrumental

Instrumental Theory

Describes what happens if firms behave in a particular way

Four Levels of Social Responsibility

Economic, Legal, Ethical, Philanthropic

Values

Enduring beliefs and ideals that are socially enforced (i.e. trust and integrity)

Bottom Line for Business Ethics

Firm survival; Profitability, revenues, sales; Stakeholders: customers, employees, channel members (manufacturers, wholesalers, retailers); Contribute to societal goals: community, country, world

Descriptive Theory

Focuses on firms behavior; addresses how decisions are made for stakeholder relationships

Normative Theory

Identifies ethical guidelines that dictate how firms should treat stakeholders

Corporate Social Responsibility

Actions associated by firms with various stakeholder interests as a priority

Social Responsibility

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

Principles

Specific boundaries for behavior that often become the basis for rules (i.e. human rights, freedom of speech)

Value Dilemma

Two or more beliefs/ideals in conflict with one another

Moral Dilemma

Two or more morals in conflict with one another

Relationships are associated with ...

both organizational success and misconduct

Secondary Stakeholders

those who are not typically engaged directly in transactions with a company and are therefore not essential to its survival (i.e. government agencies and communities)

Primary Stakeholders

those whose continued association and resources are absolutely necessary for a firm's survival (customers, shareholders, employees, suppliers)