MGMT 320 Midterm

Microsoft Sexual Harassment

Abandoned forced arbitration in sexual harassment cases. Made the company better in the long run and they were the first company to do so

Arguments against CSR - Lowers economic profit and efficiency

Always a cost to CSR direct or indirect and resources that may help with efficiency may be redirected to CSR, which will hurt the efficiency and profits of the company

Moral Intensity Analysis

Asks you to think about certain factors which determine how you look at an ethical issue 1. Magnitude of the consequence 2. Proximity 3. Social consensus (what does society think) 4. Probability that an action will lead to a result 5. Immediacy (is it happening now)

Texas Explosion Reading

Caused by a gas leak. There was a regulation up for a vote that would add a smell to natural gas. Texas voted it down but after the explosion that killed many people at school, they agreed to this regulation and added a smell to natural gas, as did many other states. The net benefits outweighed the negatives.

Intent of NCAA bylaws

Ensure sportsmanship and fair competition, as well as accountability for schools not following the rules so that those who are are not disadvantaged

Stakeholders

Entity that affects or is affected by an organization's decisions/operations

Reasons for ethical problems - Rationalization

Ethical failures may be justified by forms of rationalization

MNCs Challenges - Lack of predictability abroad

Higher costs of doing business in countries with unstable leadership as the US may decide in the future that they won't do business with that country. Businesses have to deal with the lack of independent judicial systems. There is also a lack of a Uniform Commercial Code aboard (contracts law)

Strategic Defaults Example (Golden Rule - sometimes we don't practice what we preach)

Homeowners default on their loans when they lots financially even when they can afford to pay their mortgages. The Mortgage Bankers Association condoned this, but they also had defaulted on their mortgage

Who can be charged with insider trading

If you receive the tip or if you give the tip

Payday Lenders Regulation Federal

Limited due to the intense lobbying of payday lenders. But the federal government did pass a law that prevented payday lenders from charging military members over 36% interest so payday lenders stopped doing business with military members, but Trump prevented any further regulation

Result orientated/consequentialism

Look at results to determine what is ethical

Level 3 NCAA Violation

Lowest penalty, a minor violation

Host country perspective negatives to MNCs - political interferences

MNCs impact local politics by putting pressure on local governments to create laws in their favor

Utilitarianism

Reason for regulations. Government regulation may be supported if we agree we are better off with the regulation. New positives outweigh the cost to you

Theory of amorality example

Section 230 - Backpage advertised prostitution of young girls because under the law it was legal since they couldn't be sued, even if it was unethical. But eventually the law was changed to allow lawsuits against these companies

Reasons for ethical problems - Conflicts of Interest example

Stock example - would be unethical for a prosecutor to own stock in a private prison, as then he would be incentivized to send more people to jail because he would profit from it

Examples of Market Stakeholders

Stockholders, customers, employees, creditors, sometimes the gov't

Duty Based Model strengths

Strong foundation in which to guide people

Transnational Corporations

The mechanisms that have globalized trade

Stakeholder Analysis

The modern paradigm to use when assessing the factors a business needs to consider in making key decisions. It needs to understand how the decision will impact its stakeholders or how the stakeholders will impact the firm

Commerce 1.0

The nation state began to engage in trade

Why should business be ethical? - to meet demands of business stakeholders

This includes customers who prefer ethical companies

Most common form of insider trading

Trading on information about mergers

Quota example

US put a quota on imports of Japanese Cars due to the impacts on the auto industry, but it caused the prices on these cars to rise and on US cars to rise as well

Why should business be ethical? - to comply with legal requirements

US sentencing guidelines

Dominant Environments

Understanding the characteristics of the _________ that businesses exist in is of major importance to business managers

Market Capitalism Model (American Revolution to 1930s

Laissez-Faire, no government regulation. Corporations only role is to make money and there's no corporate social responsibility

Host country perspective negatives to MNCs - exploit workers due to the weak local regulations that protect workers

Rana Plaza building collapse

Uber culture

Unwritten corporate culture of don't ask for permission, ask for forgiveness - would come into a city and break all the rules and flood the market before the regulators realized what was happening/could do anything and by the time they went to do something it was too late because the market demand for uber in the city was so high

Reasons for ethical problems - Competitive Pressure example

When businesses participate in unethical practices in factories abroad to save money

Reasons for ethical problems - Competitive Pressure

When companies are squeezed for profits they sometimes engage in unethical behavior

Role of Culture abroad

When it comes to operating abroad, there are core cultural difference between MNcs and their host countries that can make doing business there difficult

income mobility

When someone who starts poor becomes rich. US ideal of if you work hard you can make it. However, an experiment showed that mobility between classes is not as much as our society believes and that income mobility is actually very difficult

CSR - Progressive Era - Service Principle

When the company prospers, the community prospers

Legal Screen

new laws being created and the judicial branch creating rules and deciding on cases that impact the rights and conduct of businesses as well as the environment that businesses operate in

Payday Lenders

offer emergency short terms loans that take advantage of poor people by offering them a quick loan, but with a high interest rate, creating cycle of poverty and paying back these loans for people.

Proper Role of Government vs duty of corporations

promote the general welfare vs make profits - how you get regulations

enlightened self-interest

providing value to stakeholders is in a business's long run self-interest

Economic Screen Example

Decrease in corporate income taxes in 2018

Social Compact

Between government and businesses. It is what allows businesses to operate. Businesses can only operate to the extent that they act properly

Force 2- Globalization

Businesses need to understand that they exist in a global economy and if you are doing business in another country then you need to pay attention to those countries rules and respect their laws/cultures

Political Screen

Different from legal screen. Political environment and if they should engage in politics

MNCs Challenges - business capital is diverted from the business

Different tax rates (maybe higher), poorly trained workforce may make production more difficult, inadequate infrastructure

Reputation

Goodwill. the good or bad qualities of an organization or its actors that may impact an organizations relationship with its stakeholders. Companies with good reputations outperform their peers

Arguments for CSR - Government Regulation

If a business is seen as acting responsibly then the government will be under less pressure to regulate them

insider trading

-When a person gains access to confidential information about a company's financial condition and then uses that information before it becomes public to buy/sell stock

Reasons for ethical problems - Rationalization examples

- Cheating in a class with no curve won't hurt anyone but it will benefit me -Ends justify the means: going to jail to get a surgical procedure because the procedure will be financially covered since you are in jail and health care for inmates is covered

Why should business be ethical? - To minimize harm

"do no harm"

Main areas of NCAA Regulation

1. # of coaches and the duties they perform 2. Amateurism of student athletes (defend the fact that student athletes aren't paid) 3. Benefits/Scholarships (how many scholarships each program can get) 4. Recruiting Practices 5. Academic eligibility 6. Duration of practice and competition

Problems with Regulations

1. Always costs some money 2. Limit the freedom of some entity

Finance Ethics

Interest of clients over your own personal interests. When you trust someone else to make a decision for you regarding finances, you run certain risks such as conflicts of interest

Stages of Moral Reasoning - pre-conventional

1. Avoid punishment and 2. satisfy self-centered needs/get a positive response

Consequentialism Problems

1. Can be difficult to place a value on things when doing cost benefit analysis such as human life. 2. Does it factor in freedom? 3. Short term vs long term benefits 4. Many different stakeholders have to be taken into account and calculated into the equation

Forces that have shaped the dynamic business environment

1. Changing social expectations 2. Globalization 3. Emphasis on Ethics 4. Evolving government regulation 5. Dynamic natural environment 6. Technology 7. Chance 8. Income inequality/mobility

Arguments against CSR - May hurt society

Inviting businesses to engage in socially responsible acts imposes their worldview on society which may not be a good thing

Host country perspective negative to MNCs - Destruction of the environment

These countries don't have EPA like laws that protect their environment and its cheaper for countries to do things without these laws

Arguments against elite dominance

1. Education is the great equalizer 2. America is open to meritocracy - allowing non-elites to enter elite circles

Important traits of a company

1. Egoism (self-interest) 2. Benevolence (concern for others) 3. Principle (integrity)

Host country perspective positives to MNCs

1. Employment 2. Retain profits 3. Train local workforces 4. Retain control over the economy 5. Protect the natural environment 6. Maintain social and political stability

Ethical Test - use to resolve ethical problems

1. Identify the important facts and the ethical issue 2. Who are the key stakeholders and how will they be affected? 3. Who are the winners and the losers? 4. Articulate how different moral principles apply and how various models might yield different results 5. Recognize personal biases that may influence your evaluation

Corporate Social Reporting

When a company publicizes their social audit - value in transparency

Why MNCs invest abroad

1. Maximize profits 2. Create overseas markets 3. Sales offices abroad are needed to coordinate things 4. May license use of patents to firms abroad that sell their products 5. Foreign branch may become autonomous and make their own decisions 6. Manufacturing abroad saves money and creates jobs there, which placates local governments

Why Tarrifs

1. Protect local industries from less costly foreign competition 2. Anti -dumping measure 3. Contervailing tariffs

What businesses must understand about stakeholders (2/4 questions asked during stakeholder analysis)

1. Who the key stakeholders are 2. The nature and power of each stakeholder

Justice Model

3 parts, which makes it complicated but essentially is the questions of whether something is fair according to society's rules

Stages of Moral Reasoning - Conventional

3. Conform with a group and 4. accept legal restrictions as being part of society

Stages of Moral Reasoning - post-conventional

5. Accept legal restrictions balanced with individual rights as being in the best interests of society/the individual. 6. find satisfaction in being ethical for personal reasons

US sentencing guidelines

7 steps taken to reduce unethical practices at a company prior to getting in trouble and to encourage internal compliance. I was doing the right thing so we're not at fault - protects against a rouge employee

Ownership Theory of the Firm

A firms only obligation/social responsibility is to their shareholders to make money and to engage in activities that do so without fraud. Social projects cost the shareholders money and creates higher prices, which distorts the market.

Categorical Imperative

A person should not act unless they are willing to have their conduct become universal law. One should consider the consequences of their act being universalized and act based on how society will be impacted. Is a hybrid model of the two ethics models (duty and consequentialism)

non-market stakeholders

A stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions.

stakeholder salience

A stakeholder's ability to stand out from the background, as that is who managers pay the most attention to. Stakeholders are more salient when they possess power, legitimacy and urgency.

Contervailing tariffs

Attempt to get at the indirect ways that local government help local businesses

Ethics based enforcement models - compliance based

Avoid legal sanctions and there are everyday programs. Also use detection and punishment

Why should business be ethical? - Enhances business performance

Being an ethical company is a positive and poor ethics can have monetary and reputational consequences

Milgram Experiment takeaways - corporate culture matters

Being told what to do may cause ordinary ethical people to do unethical things

Origins of CSR

Belief that a business was socially responsible when it maximized profits while operating within the law and that businessmen would give charitable contributions on their own because it was virtuous, but only individual contributions were given, the businesses was not expected to make charitable contributions

Legal Screen Examples

Binding arbitration and no class actions being allowed NCAA example - driving forces are legal. Courts application of the anti-trust law and the NCAA attempting to get federal preemption for a law that will trump the state laws that protect a players rights to NIL

UBS example

Book had them as the poster child for CSR, but in reality they took advantage of holocaust survivors and held their clients assets overseas to help their clients avoid paying taxes

social entrepreneur

Build organizations that are driven by a core mission to create and sustain social rather than economic value

Chris Petersen coaching philosophy

Built for Life - football is plan B and life after football is plan A

Theory of Moral Unity

Business actions are judged by the general ethical standards of society, not by a special set of more permissive standards.

Theory of amorality leads to the conventionalist ethic

Business is a game where lower ethics are allowed because they are free to act in their best interests even if its morally questionable

Business ethics theory 1 - theory of amorality

Business should be conducted without reference to the full range of ethical standards

Relationship between businesses, government, and society

Businesses are highly interdependent with the societies they operate in Have a symbiotic relationship where each constantly effects the other

Reasons for ethical problems - Cross - cultural Contradictions

Businesses may be unaware of cultural norms in foreign countries, which can lead to unethical conduct

Tech Screen

Businesses need to consider how to use and adapt to new technologies because failure to do so can be fatal

Social Environment Screen Examples

Charleston Church Shooting - Businesses stopped selling confederate flags after the shooting due to the shooter targeting the black community and being associated with that flag Us culture of free press - not the same everywhere, example of china where they can kill a press story when they want, but the US can't - Article on Chinese leader that was unfavorable was killed by China

Geophysical Screen examples

Climate change: Insurance companies are pricing possible climate change consequences into their rates, such as charging more in California where wildfires are rampant Rating agencies are telling cities that they need to create climate change plans of their cost of borrowing will increase

Immanuel Kant

Combined the golden rule with consequentialism

Ethics based enforcement models - integrity based

Combines a concern for the law with an emphasis on personal integrity. Is better in the long run for the company

Commerce 3

Communications flow and empower the individual

Examples of non-market stakeholders

Community, competitors, sometimes the government

Ethics

Conception of right or wrong conduct that is different from laws, as they are not formal written rules, but are guides to moral behavior from multiple sources.

Legal Impediments to CSR 1800s

Corporate charters forbid charitable donations because the profits belonged to the shareholders and the board can't give away shareholders money

Key Motivator of CSR

Corporations realize that they must give back or their power will be curved. They regulate themselves to avoid government regulation. They have a responsibility to stakeholders other than just shareholders

Corporate Social Responsibility

Corporations should act in ways that enhance society and should be held accountable for their actions that impact people

Arguments for CSR - CSR balances corporate power with responsibility

Corporations will act more responsibly - Noblese Oblige - the obligations of the nobility

Arguments against CSR - Imposes hidden costs on to stakeholders

EX: cost to someone when employees spend time away from a core purpose

law of comparative advantage

Each country should specialize in the good that they can produce the most efficiently, which is where the prices of the material is the lowest and then trade that good with other countries and trade for other goods that that country specializes in

Views on regulation

Most Americans prefer little to no regulation Rs - less likely to comply with regulations than D's due to views on freedom

Utilitarianism Ethics

Cost-benefit analysis - do what benefits the most amount of people

Problem with Free Trade

Countries relative efficiency changes overtime. If a country is no longer the most efficient at producing a good, they will cut down on the production of that good, which may cost some people their jobs

Rights Model Example

Covid vaccine trial where participants are exposed to the virus for study purposes

Dominance Theory (1890 - 1950s)

Created by critics of business during the era of big trusts and monopolies. Idea that there's a small number of elite within business that dominate society and work to perpetuate wealth for a few. Under this model, regulations are viewed as not being effective in achieving results. This model includes influence through lobbying and businesses being able to impact the environment without consequences

Virtue Ethics

Creates a list of moral values that people should have that make them ethical. However, it is mainly aspirational as we don't serve the model that well even though we should strive to

Other Screens

Customer and Competitor Screens

Social Darwinism

Due to the idea of natural selection of the fittest, there was the idea that businesses should not be giving charitable donations as it interfered with natural selection and improperly redirected society's resources to those least able to benefit

CSR in the late 19th century

Due to the industrial revolution, people were moving to cities where there were many health concerns so people began to rethink what obligations corporations might have to the community

Blackrock letter and the updated purpose of businesses by business roundtable

Example of changing social expectations

intellectual property and the covid vaccine

Example of globalization. In some countries, IP is not as protected so they can copy the vaccine without paying for the IP (India for example)

Clopening Example

Example of managing stakeholders - passed law banning this practice where employees were scheduled for closing and opening shifts that were hours apart

Economic Screen

Federal reserve sets monetary policy which impacts interest rates and the legislative branches set tax rates, as well as minimum wage

Consequentialism Problems Example Ford - Pinto and the problem with use cost benefit analysis

Ford-Pinto - valued the cost of human life (how much the lawsuits would cost them) and compared it with the cost of fixing the cars. Their analysis showed that it was cheaper for them to not fix the cars and pay the lawsuit money, which is what they did. Although the followed the model of consequentialism, it was not the right ethical decision. They also just looked at the bottom line numbers, but didn't take into account the other impacts, such as the damage to their reputation

Brian Jorgensen

Former financial analyst for Microsoft who had confidential information about Microsoft's earnings and their earning reports before they were made public. Used this information to tell his friend about the earnings (3 times) that would make his friend money if he acted on the information, so his friend did this and bought/sold stock based on the confidential information that Brian gave him and then Brian got a portion of the money made from the stock trade

Tariff Pickup Truck example of protecting local industries with tariffs and the long term impacts of tariffs

France and Germany imposed a tariff on American frozen chicken due to the high demand for it in their countries over local chicken. In response, the US placed a tariff on foreign pickup trucks, which is why today most pickup trucks are American and not imported

Evidence for Elite Dominance

George W. Bush and Hillary Clinton

Section 230

Gives online service providers strong protection from liability for libelous material posted by third-parties on their systems. But controversy over this as then many websites have children pornographic material on them and can't be sued for having this type of material

Level 1 NCAA Violation

Most serious, it means that the player or school had a substantial impermissible benefit

Power of Corporations

Have immense power that they can do great good with but too much power can also lead to problems

Clawback

Having to return money that you've already been paid

Keep in mind the major political and economic systems in which countries operate

How democratic a country is or how much free enterprise there is in a country

Distributive Justice examples

How should we distribute the covid vaccine? Question of taxes? are taxes fairly distributed - WA has a very regressive tax system that is not that equitable even if it is equal

CSR - Modern Period

Howard Bowen - Managers have an ethical duty to consider the broad social implications of their decisions and must use their power in keeping with the broad social contract or risk losing it. The debate about whether companies should engage in CSR is mostly (but not entirely) over as most businesses recognize the value of CSR

IBM and Microsoft chance example

IBM was a large computer and software manufacturer in the 1970s but were being sued by the gov't for being a monopoly, due to them having a lot of market power. But IBM had created a new product, the PC, but if they owned the PC and the software they felt that this would further contribute to them being a monopoly and being vertically integrated. The IBM chairman happen to be on the board with Mary Gates, Bill Gates' mother and she convinced him to do business with Microsoft, so IBM sold their operating system to Microsoft, which was a massive error and allowed Microsoft to flourish.

Disclosure Rule

Idea of transparency where the idea is you ask yourself if you would do this act if it would be on the front page of a newspaper tomorrow. Very effective at curving conflicts of interest

Force 1 - Changing Social Expectations

In the 1970s it was believed that the duty of the business was to make money for its shareholders but now society believes that the obligations of businesses go beyond their shareholders and include obligations to stakeholders

Rights Ethics Model

Individuals have certain rights to be treated fairly and anything that interferes with these rights in unethical. These rights also can't be selectively applied. Rights are other made into laws such as the ADA

Outsourcing of jobs

Issue with globalization. Companies will fly in foreign workers to replace their current employees. Employees will have to train their replacements prior to being fired at the end of the month. Then, the trained foreign employees are sent back to their countries to work for 1/3 of the wage of the fired employees

Political Screen example

Kaepernick and kneeling Apple ignoring a tweet by Trump taking credit for opening a Mac factory that had been opened since 2013

Education

Key driver between the lack of income mobility

Tech Screen Example

Kodak - only focused on their current direct competition, but failed to see how tech was creating new competitors

Arguments for CSR - Promotes long-term profits of a business

Motivates and retains employees and brings in customers as customers view the business more favorably

O'Bannon v. NCAA

Lawsuit against the NCAA for violating antitrust statues by limiting student compensation as it related to Name, Image, and Likeness

Milgram Experiment takeaways - distance matters

Learners were treated harsher the further away that they were, meaning that we act more ethical when something is closer

Free Trade

Makes it easier and cheaper for US businesses to export goods and gives similar benefits to the counter party who is exporting goods to the US

CSR - Progressive Era - Balance

Managers had a duty to try and balance the competing interests of corporations

Arguments against CSR - Philosophic Argument

Milton Friedman - responsibility of the business is to make money for its shareholders

Level 2 NCAA Violation

Minimal impermissible benefit, less than a level one, but more than a level 3

Managing Stakeholders

Must be proactive and understand that key stakeholders are necessary to the survival of the business and that their conduct will results in responses from the public

Reasons for ethical problems - Cross - cultural Contradictions example

NBA tweet and Heineken displayed the flags of countries participating in the World Cup on their beer bottles, but included Saudi Arabia, a muslim country and muslims don't drink alcohol

Pluralist model (1960s- now)

New groups emerged that exerted power on business and there is no single dominant force in society, as power is constantly shifting

Evidence against elite dominance

Obama and Bill Clinton

Duty Based Model weaknesses

Occasionally difficult to consistently apply

income inequality

One of the basic political conflicts in every nation is the economic tension between the rich and the poor. US policy does less than other countries in terms of wealth transfers and has high levels of wealth disparity. EX: Tax burden

Externality

One of the reasons for regulation. An unintended consequence of a transaction between two entities. Regulations are used to mitigate externalities when tort law may not be good enough Ex: must have insurance to drive a car

Milton Friedman (Friedmansim)

Ownership interests > any other interests. Pushed the ownership theory of the firm.

Golden Rule

Part of duty-based ethics. Do onto others as you would have them do onto you

Conflict Minerals

Part of the challenge with doing business abroad in regards to the lack of predictability. Businesses have to know and be wary of where their minerals are coming from. Conflict minerals are those mined from regions with political conflicts and are not supposed to be use in production by businesses

Procedural Justice

Part of the justice ethics model. Duty-based and not concerned with the end result. If we follow pre-existing rules then the results in just. It is not flexible

distrubutive justice

Part of the justice ethics model. Is a form of consequentialism because the results matter and if focuses on the end result and if the end results is fair. But treating people the same (equality) may not be equitable

Compensatory Justice

Part of the justice ethics model. Pre-set rules determine what is fair concerning how we compensate those who have been wronged in the past - ex:tort law

Warren Buffet and CSR

Payback for thriving in a favorable society because you have to have society in place for you to have smart people to work with you

Reasons for ethical problems - personal gain/self interest

People act in their own self interests sometimes at the expense of others - MBA oath. Can be an engine of our success but left unchecked it may lead to ruin

Corruption is cultural (company culture)

People cross the lines and others see these people crossing the line so they follow the first group to keep up because they use the first group as a benchmark

Free trade key point - costs are focused and benefits are diffused

People favor free trade until it threatens they job. So people who lose their job because of free trade feel the cost directly and are very vocal about that cost of free trade. But people who benefit from the lower costs of goods (since goods are made overseas where it's cheaper to produce them due to lower production costs) don't feel this directly and aren't as vocal about the benefits

Why do people engage in white collar crime - rationalization

People rationalize their temptations to participate in a white collar criminal act. Also because the act is not eminent, you have more time to think about your actions and thus more time to rationalize them

Milgram Experiment takeaways - see ourselves are morally superior

People usually say that they'll stop before others

Anti-dumping measures

Punish foreign producers for taking actions that help their local companies by selling at below cost

Globalization

Process in which international trade and financial flows integrate the world economy, leading to the spread of tech, culture and politics. Not new, but is happening faster than ever currently

Duty based ethics

Rely on pre-existing rules that guide you to determine what is ethical. It is not the consequence of an act but the nature of the act itself that determines if it's ethical

Arguments for CSR - Improves stakeholder relationships and the reputation of the corporation

Reputation is a highly valuable intangible asset and good potential employees want to work somewhere with a good reputation

Restitution Rule

Rule that if a school plays with a player that is under investigation by the NCAA, even if the school is granted an injunction by the court, if a later ruling is in favor of the NCAA, then the school will lose all its wins that they won if the player under investigation was playing during these games

Ethical Tone in a company

Set by managers, ethics starts at the top and ethical management creates an environment where employees act ethically

NIL - Name, image, and likeness

Should college athletes get compensation for the use of their NIL? Currently don't. UW support the NIL, but wants to ensure it is carried out in the right way. It is likely that they will soon get compensation for their NIL and will be able to commercialize themselves due to the new legislation being put in place

Arguments against CSR - Places responsibility on the business rather than the individual

Should it be the businesses job to engage in CSR or the individuals?

Arguments against CSR - Imposes unequal costs among competitors

Some businesses are committed to CSR, but some aren't which can lead to different costs of good that can impact the choices of consumers. For example, if you company spends more money on CSR, while another company doesn't spend anything, Company A will charge higher prices, as they need more money to make a profit

Herbert Simon and CSR

Social capital (where you grow up and the favorable government/organizational skills that exist) is responsible for at least 90% of what people earn in wealthy societies

Stakeholder Model (Today)

Social contract between businesses and society where companies exist because society has given them the right to exist by creating rules and as companies gain more power, society expects more of them

Social Environment Screen

Social expectations are a function of both our culture and technology and businesses must understand these social exceptions in all countries that they do business

Arguments against CSR - Requires skills that the business may lack

Societal problems can be complex and business people may not be skilled enough to solve problems in the right way with their resources, as that is not what they are trained to do

Ethical Egotist

Someone who puts their own interests above others/all else in business

Consequentialism Problems example with human rights violations

Sometimes consequentialism does not factor in liberty and is used to justify the violations of human rights such as with the Japanese internment camps. Saw these camps as benefiting more people than it hurt, so they used consequentialism to justify this action

Payday Lenders Regulation State

States stepped in - WA: lenders can only give x amount of loans to someone in y amount of time

ethical relativism example

Supply chains overseas - companies do what is ethical in the country the supply chain is in but that may cause issues at home where the ethical standards are different. EX: Nike and the pictures of a child abroad sewing a nike soccer ball

Reasons for ethical problems - Conflicts of Interest

When a person is incentivized in a way that compromises that person's loyalty to another party

Tariffs

Taxes levied on goods when they arrive in a country that did not produce the good. Reduce competition

Power

The ability to obtain a desired result or comply another entity to act a certain way

Accounting Ethics

The accounting industry faces many conflicts of interest as there are both auditors and consultants at some businesses

Why do people engage in white collar crime - timing

The crime is further off in the future as opposed to violent crimes which happen immediately when you go an commit them. But something like insider trading may happen much later

Other challenges for MNCS

The environment (life itself in the country) Technology transfers

Geophysical Screen

The finite nature of earth's resources including its people can constrain business

MNCs Challenges - Foreign laws make business abroad difficult

The host country's laws may be different and be more difficult to navigate when doing business there and also may change constantly which changes the rules of the game.

Theory of Moral Unity leads to ethical relativism

The idea that there's no fixed ethical rules but ethics rules depend on the time and circumstances and that ethical models vary throughout the world

Commerce 2

The rise of the corporation

Penalty Structure Rule

The school has to declare a player ineligible, not the NCAA

Why do people engage in white collar crime - victims

The victims are further away and they are unknown/not certain. It is different from walking up to someone and robbing them

Corporate Identity

The way a company portrays itself

Corporate Image

The way in which organizations members believe others see the organization

Company Culture

The way we do things around here - may be written or unwritten

Why should business be ethical? - Trust

There are added frictions when the counterparty is untrustworthy and there are increased costs. Trust also has a value as it makes relationships with counterparts less cost worthy and reduces frictions

Role of Culture abroad example

Tweet by the guy in the NBA

Reasons for ethical problems - culture example

UN parking example - diplomats visiting NY for a convention were told they could park anywhere without getting a ticket. Countries that were known for corruption had the highest number of diplomats that violated parking rules, but countries that have limited corruption didn't violate the parking rules. This shows how cultural norms relate to corruption and are persistent

Why should business be ethical? - Enhances business performance example

VW - cost them a lot of money and are no longer on the list of the most admired companies

Power of stakeholders

Voting Economic Political Legal Informational

MNCs Challenges - business capital is diverted from the business example

Walmart in India- inadequate infrastructure

Force 3 - Government Regulation

Waves of government regulations in the past 50 years. Increases in regulation, followed by deregulation and vice versa

Reputation Examples

Wells Fargo and VW took hits to their reputation for unethical practices

Corruption is cultural example

Wells Fargo scandal involved so many employees because that was the company culture same with VW. Others crossed the line because they saw others doing it first

Social Venture

What a social entrepreneur builds

Other book questions for stakeholder analysis

What are their interests and do they form coalitions

strategic radar screens

What business need to focus on for the future, but not the past like dynamic forces. Also called environmental analysis

Integrated Reports

When a business releases their requires financial information and includes social and environmental information with it

philanthropy

When a company gives money directly to a charitable causes to advance social welfare

John Rawl's Veil of Ignorance

You can only make fair decisions concerning distributive justice if you have no stake in the outcome. If you have stake then your bias will prevent you from being fair

B Corporation

a business that explicitly seeks to blend its social objectives with its financial goals to solve social problems. Must meed rigorous social standards to qualify

social audit

a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs

Compensatory Justice example

affirmative action

System Theory

all living organisms interact with and are affected by other forces in their environment. The key to survival is being able to adapt to the changing conditions

ultra vires

beyond the powers. Used to justify the ban on corporate charitable contributions. Means that contributions were beyond the power of the board

MNCs Challenges - Corruption abroad

bribery laws vary per country and bribery is rampant in some countries. US law bans the bribery of foreign officials to conduct an official act to gain business but that may be more lose or more strict in other places

Force 4- Chance

can cause great shifts in wealth and contribute to the success of failures of a business

boundary spanning departments

departments within an organization that reach across the dividing line that separates the company from groups and people in society EX: government affairs

Why should business be ethical? - promote morality

ethical company aligns with an individuals desire to act ethically

Reasons for ethical problems - Culture

how we do things around here. Plays a significant role in if people act ethically

Iron Law of Responsibility

in the long run, those who do not use power in ways that society considers responsible will tend to lose it so CSR is expected

Quotas

limitations on the amount of specific products that may be imported from certain countries during a given time period.

Business Ethics

the application of general ethical ideas to business behavior

Market Stakeholders

those that engage in economic transactions with the company

CSR - Progressive Era - Managers = Trustees

who had a responsibility to look out for others, especially their employees