Chapter 5

Lucia is responsible for establishing a confidential service that employees can use to question if a practice is unethical and she also makes sure the company complies with government laws and regulations. Lucia is an example of a(n) _____.

ethics officer

In a business setting, managers sometimes do not realize they are behaving unethically, primarily because they

fail to take into account the ethical dimension of business decisions

Generon Inc. has moved its production to a new nation. It freely dumps its harmful waste in the rivers and causes environmental degradation there. In this case, Generon has contributed to the

global tragedy of the commons

When making ethical decisions, ______ factors are stressed in Japan, while ______ factors are more important in the United States.

organizational; individual or personal

Ethics Officers

responsible for managing their organizations' ethics and legal compliance programs

James is an expatriate from Nebraska managing a tech support center in India. He is a firm believer in the minimum wage and treating employees fairly. Yet he sees his assistant manager firing an employee and hiring his neighbor to do the job at a lower rate. Knowing this would never be accepted in the United States, James confronts his assistant manager, claiming this behavior isn't right. He is displaying the ______ approach to ethics.

righteous moralist

Certain theories accept that there are rights, both positive and negative, that all humans have simply because they are human. These are called ______ theories.

rights

The _______ theories recognize that there are things we CANNOT do against individuals because they have certain moral, fundamental rights.

rights

The managers of Simple Sound Manufacturing are struggling to meet their quota that was recently increased by upper management. They decide to eliminate two quality control steps in the manufacturing process. This is unethical behavior that was a result of

unrealistic performance goals

______ ethics measure actions on a cost-benefit scale.

utilitarian

Ethical Strategy

A course of action that does not violate a company's business ethics.

The first thing Brett's manager told him when he started working was that the company always considered the social consequences of any business decision. This is a reflection of _____.

CSR

Which congressional act outlaws the payment of bribes to foreign government officials to gain businesses?

Foreign Corrupt Practices Act

Moral Imagination

Standing in the shoes of a stakeholder and asking how a proposed decision will affect that stakeholder.

Stakeholders

The individuals or groups that have an interest, stake, or claim in the actions and overall performance of a company.

Utilitarian Approach to Ethics

These hold that the moral worth of actions or practices is determined by their consequences.

Which ethical theory emphasizes that the best actions are those that benefit the most number of people and harm the least number of people?

Utilitarianism

Which company is contributing to the global tragedy of the commons?

Virtual-Day Inc. moved production to a South American country with lower environmental regulations and sends pollutants freely into the air.

A payment which ensures that a business receives the standard treatment that it ought to receive from a foreign government is known as

a grease payment

A company's organizational _____ reflects the values and norms that are shared among employees of an organization.

culture

Moral Courage

enables managers to walk away from a decision that is profitable but unethical, gives an employee the strength to say no to a superior, etc.

Internal Stakeholders

People who work for or own the business such as employees, directors, and stockholders.

Sustainable Strategies

Strategies that not only help the multinational firm make good profits but that do so without harming the environment, while simultaneously ensuring that the corporation acts in a socially responsible manner with regard to its multiple stakeholders.

Business Ethics

The accepted principles of right and wrong governing the conduct of business people.

A person who follows the idea of _____ says that the multinational's home-country standards of ethics are the appropriate approach to follow in foreign countries.

a righteous moralist

Some ethics experts have proposed practical guides or ethical ______ to make ethical decisions in a systematic way.

algorithms

Many companies develop a formal statement of primary values and ethical standards for employees and managers to follow. This is called a

code of ethics

Companies can use psychological tests in the hiring process to help identify people who have a strong sense of personal ethics.

true

According to the text, which three actions can managers take to ensure that ethical issues are considered in business decision making?

-Implement decision-making processes that consider ethical aspects of business decisions. -Build an organizational culture that values ethical behavior. -Favor hiring and promoting of people with a sense of personal ethics.

Which two of Hofstede's dimensions are present in countries where ethical practices are commonly practiced?

-individuality -uncertainty avoidance

What are determinants of ethical behavior?

-personal ethics -decision-making processes -organizational culture -unrealistic performance goals -leadership -societal culture

Which two theories provide the moral compass that is important when thinking through the ethical implications of decisions in a systematic way?

1) Rights theories 2) Rawl's theory of justice

Five-step process for thinking through ethical problems:

1) businesspeople should identify which stakeholders a decision would affect and in what ways 2) involves judging the ethics of the proposed strategic decision, given the information gained in step 1 3) managers must establish moral intent 4) requires the company to engage in ethical behavior 5) requires the business to audit its decisions, making sure they are consistent with ethical principles

Celeste, a manager at a multinational investment firm located in Italy, knows that the company isn't reporting accurate profits to the government. She explains that this action is fine because all the multinational investment firms behave in the same manner. Celeste can be described as a(n) ______.

a naive immoralist

What is the final step companies should take when assessing ethical issues?

audit the company's decisions

The belief that ethics are culturally determined and a firm should adopt the ethics of the country it is doing business in is

cultural relativism

Mason is an expatriate who was recently moved from a South American location, where his company said he was allowed to make facilitating payments in order to hasten government documentation, to a European location where the company says he needs to find another way to accomplish this task because facilitating payments aren't allowed. Which of the straw man approaches to ethics does this represent?

cultural relavitism

An organization's code of ethics may be partially based on documents such as the United Nations Universal Declaration of ______ ______

human rights

According to the Friedman Doctrine, what is the only social responsibility a company has as long as it stays within the rules of law?

increasing profits

A(n) _________ distribution is one that is considered fair and equitable.

just

______ refers to the moral obligation to act in an honorable and benevolent manner.

noblesse oblige

The generally accepted principles and values that govern interactions between individuals are called

personal ethics

Noblesse Oblige

principle that persons of high rank or birth are obliged to act nobly

Ten years after he proposed what came to be known as Sullivan's principles, Leon Sullivan concluded that following his principles

was not sufficient to ethically justify the existence of Western businesses in South Africa

Celia, a product manager, advocated for the company to proceed with the development of the product even though it hadn't received FDA approval yet because she wanted to be the first to market with the product when it was approved. Jessica, the director of product development, felt this wasn't a good idea because early studies had shown that the product might be causing neurological problems in users and might need to be reformulated. Which step in the process to assess an ethical issue does this represent?

establishing moral intent

Marietta is visiting her company's manufacturing subcontractor in Pakistan. She notices children working on the machinery with no air conditioning and little access to water. But she also knows these children are probably supporting their families. Marietta can't decide if children working in the factory is appropriate or inappropriate. This is an example of a(n) ______.

ethical dilemma

The __________ is a straw man approach to business ethics.

Friedman Doctrine

The straw men theory that states that businesses should behave in a socially responsible manner, according to ethical custom and without deception and fraud is the _______.

Friedman Doctrine

External Stakeholders

Individuals or groups that have some claim on a firm such as customers, suppliers, and unions.

Naive Immoralist

One who asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.

Righteous Moralist

One who claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

Corporate Social Responsibility (CSR)

Refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences.