MGMT 309: Chapter 4 "Responding to the Ethical and Social Environment"

Political Actions Committee (PAC)

An organization created to solicit and distribute money to political candidates

Philanthropic Giving

Awarding funds or gifts to charities or other worthy causes.

Ethical Behavior

Behavior that conforms to generally accepted social norms.

Regulation

Government's attempt to influence business by establishing laws and rules that dictate what businesses can and cannot do. and through legislation

Governmental Influence on Business

- Environmental protection legislation - Consumer protection legislation - Employee protection legislation - Securities legislation - Tax codes

Interpersonal Justice

Degree of fairness people see in how they are treated by others in the organization.

Procedural Justice

Individual perceptions of the fairness used to determine various outcomes.

Organizational Stakeholder

Person or organization who is directly affected by the practices of an organization and has a stake in its performance.

Organizational Justice

The perceptions of people in an organization regarding fairness.

Social Responsibility

The set of obligations an organization has to protect and enhance the societal context in which it functions.

Unethical Behavior

Behavior that does not conform to generally accepted social norms.

ethical norm for utility

whether a particular act optimizes what is best for the organization's constituencies

ethical norm for caring

whether the act is consistent with people's responsibilities to one another

ethical norm for justice

whether the act is consistent with what most people would see as fair

ethical norm for rights

whether the act respects the rights of the people involved

Business Influence on Government

- Personal contacts and networks - Lobbying - Political action committees - Favors and other influence tactics

arguments for social responsibility

1. business creates problems and should solve them 2.corporations are citizens in society

what's the three step model for applying ethical judgments?

1. gather the relevant factual info 2. determine the most appropriate moral values 3. make an ethical judgment based on the rightness and wrongness of the proposed activity or policy

what are the three areas of special concern for managers?

1. how an organization treats its employees 2. how employees treat the organization 3. how employees and the organization treat other economic agents

arguments against social responsibility

1. the purpose of business in US society is to generate profit for owners 2. involvement in social programs gives business too much power 3. there's potential for conflicts of interest 4. business lacks the expertise to manage social programs

what are the four ethical norms?

1. utility 2. rights 3. justice 4. caring

Corporate Social Audit

A formal and thorough analysis of the effectiveness of a firm's social performance.

Code of Ethics

A formal, written statement of the values and ethical standards that guide a firm's actions.

Sarbanes-Oxley Act

A law passed in 2002 that requires CEOs and CFOs to personally vouch for the truthfulness and fairness of their firm's financial disclosure.

Defensive Stance

A social responsibility stance in which an organization does everything that is required of it legally, but nothing more.

Accommodative Stance

A social responsibility stance in which an organization meets its legal and ethical obligations but will also go beyond these obligations in selected cases.

Proactive Stance

A social responsibility stance in which an organization views itself as a citizen in a society and proactively seeks opportunities to contribute.

Obstructionist Stance

An approach to social responsibility in which firms do as little as possible to solve social or environmental problems.

The four ways that ethics are obtained

Family, peers, values and morals, and individual experience.

Ethics

One's personal beliefs about whether a behavior, action, or decision is right or wrong.

Informational Justice

Perceived fairness of information used to arrive at decisions.

Managerial Ethics

Standards of behavior that guide individual managers in their work.

Whistle-Blowing

The disclosure by an employee of illegal or unethical conduct on the part of others within the organization.

Ethical Compliance

The extent to which an organization and its members follow basic ethical standards of behavior.

Legal Compliance

The extent to which an organization complies with local, state, federal, and international laws.

Lobbying

The use of persons or groups to formally represent an organization or group of organizations before political bodies to influence the government.

who are economic agents?

customers competitors stockholders suppliers dealers unions

distributive justice

people's perception of the fairness with which rewards are distributed within the organization