mgt340 CH 8,9,10 quiz

Triple Bottom Line (measurement tool)

Takes into account social, environmental, and financial impacts of decisions made within an organization. ,

Process controls

managements effort to ethics program. The methods or system for ethics evaluation.

Six Sigma

reduces defects of products and strive for continual improvement.

Code of conduct

regulatory set of rules. elicit less debate about specific subjects

Global Reporting Initiative (GRI):

the mainstream if disclosure on things like environmental, social, and governance performance

Statement of values

these are fully developed by input from all stakeholders and concived by management "code of ethics" and "statement of values" used interchangeably

Self-Reference Criterion (SRC)

unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions

Multinational corporations

): Public companies that operate on a global scale without significant ties to any one nation or region. Represent the highest level of international business commitment and are characterized by a global strategy focusing on opportunities throughout the world.

Reasons codes fail

-Not promoted so employees don't read it -Not easily accessible. Written too legalistically -Written vaguely, providing no accurate direction. -Top management never refers to the code in body or spirit.

VALUES orientation

TO grow shareed values in a company giving it a foundation of ethical culture. clear basis on which to make decisons.

Global Ethics Issues

-Corruption -Variations in international regulation -Supply chain issues involving human rights violations -Bribery -Antitrust activity: Vertical systems -Internet security and privacy -Human rights -Health care -Labor and right to work -Compensation: A living wage -Executive compensation -Consumerism: Made-to-break

Importance of Ethical Decision Making in Global Business....Companies should?

-Incorporate global and domestic ethical issues in their risk management strategies. -Formulate their own global ethical codes. -Appoint ethics officers or committees to oversee and handle global compliance issues. -Provide extensive training to its employees.

Socialism

Economic theories advocating the creation of a society when wealth and power are shared and distributed evenly based on the amount of work expended in production.

Ethics Officers Responsibilities

1.Assess needs/risks an organization-wide ethics program must address. 2.Develop/distribute the code of conduct or ethics. 3. Conduct training programs. 4. Establish/maintain confidential services to answer employees' ethical questions. 5. Make sure company is in compliance. 6. Monitor/audit ethical conduct. 7. Take action on code violations. 8. Review/update code.

Six values desirable for codes of ethics

: (1) trustworthiness, (2) respect, (3) responsibility, (4) fairness, (5) caring (6) citizenship.

Compliance Research

: Both approaches can interact or work toward the same end

FSGO

A "carrot-and-stick" philosophy. Carrot = Avoid penalties should a violation occur. Stick = Possibility of being fined or put on probation if convicted of a crime Encourages federal judges to increase fines for organizations that continually tolerate misconduct. To reduce or eliminate fines for firms with extensive compliance programs that make due diligence attempts to abide by legal and ethical standards.

Ethics Programs

Designed to encourage ethical decision making in business. Must be well-designed to prevent major misconduct.

U.K. Anti-Bribery Act:

Act: Foreign companies with operations in the United Kingdom, can be held liable for bribery, no matter where the offense is committed or who in the company commits the act, even if the bribe itself has no connection with the United Kingdom.

Economic systems

Adam Smith and laissez-faire John Maynard Keynes and the state Milton Friedman and capitalism

World Trade Organization

Administers its own trade agreements, facilitates trade negotiations, settles trade disputes, and monitors the trade policies of member nations.

Social democracy

Allows private ownership of property and also features a large government equipped to offer such services as education and health care to its citizens.

social audit

Assessing and reporting on a business's performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders.

Behavioral economics

Assumes humans act irrationally because of genetics, emotions, learned behavior, and heuristics, or rules of thumb.

Rational economics

Based on the assumption that people are predictable and will maximize the utility of their choices relative to their needs and wants.

national culture

Broader concept than organizational culture. Includes everything—both tangible items, such as artifacts, and intangible entities, such as concepts and values.

Implementing an Ethics Program: Shared Values is the Glue of Successful Management

Check the content of the company's code of ethics. The frequency of communication on the ethical code and program. Quality of communication. Senior management's ability to successfully incorporate ethics into the organization. Local management's ability to do the same.

Success of an ethics program depends on

Content of the company's code of ethics. Frequency and quality of communication regarding the ethical code and program. Quality of communication. Senior and local management's ability to successfully incorporate ethics into the organization.

Uncertainty avoidance

How members of a society respond to uncertainty or ambiguity.

Undesirable common values

Ignorance, pride and egoism, selfish desires, lust, greed, adultery, theft, deceit, lying, murder, hypocrisy, slander, and addiction

formal controls

Include input controls such as proper selection of employees, effective ethics training, and strong structural systems

The Need for Organizational Ethics Programs

Increase employees' ethical awareness, participation in ethical decision making, and ethical behavior. Fostering ethical decision making requires terminating unethical employees and improving the firm's ethical standards The more misconduct, the less trust employees feel toward the organization—and the greater the turnover. Companies are vulnerable to ethical problems and legal violations if their employees do not know how to make the right decisions

Employee Diversity

Increase employees' work ethics awareness, integrity, willingness to deliver information to supervisors, use of reporting mechanisms, and perception that ethical decisions are being made.

Benefit if ethical auditing

Information derived from audits is used to ensure maximum impact with available resources. Identifies potential risks and liabilities and improves an organization's compliance with the law.

Desirable common values

Integrity, family and community unity, equality, honesty, fidelity, sharing, and unselfishness

MNC Issues

MNCs use labor-saving devices that increase unemployment in countries where they manufacture. Size and financial clout enable them to control money, supplies, employment, and even the economic well-being of less-developed countries. Size and power of MNCs create ethical issues involving the exploitation of both natural and human resources. MNCs can borrow money from local capital markets in much higher volume than smaller local firms. MNCs have been accused of failing to carry an appropriate share of the cost of social development

International Monetary Fund

Makes short-term loans to member countries with deficits. Provides foreign currencies for its members. Provides information about countries that might default on their debts. Member states provide resources to fund the IMF through a system of quotas proportional to the size of their respective economies.

Cultural relativism

Morality varies from one culture to another and "right" and "wrong" are defined differently.

Bimodal wealth distribution

Occurs when the middle class shrinks, resulting in highly concentrated wealth among the rich and increased numbers of poor people with few resources.

The U.S. Foreign Corrupt Practices Act (FCPA):

Prohibits American companies from making payments to foreign officials for the purpose of obtaining or retaining business.

United Nations Global Compact

Promote worldwide peace, establish beneficial relationships between countries, and support the creation of better standards and human rights on a global scale. Set of 10 principles that promote human rights, sustainability, and the eradication of corruption

Updated Foreign Corrupt Practices Act guidelines

Recommend incorporating incentives into the firms corporate culture to encourage ethical behavior

code of ethics

Serve as principles and the basis for rules of conduct -generally specifies method for reporting violation, disciplinary action for violations, and a structure of due process.

Power distance

The power inequality between superiors and subordinates.

Organizational probation

Use of on-site consultants to observe and monitor legal compliance efforts as well as to report the firm's progress toward avoiding misconduct to the U.S. Sentencing Commission

Global common values

Values shared across most cultures. -Desirable common values -Undesirable common values

Risk compartmentalization

When profit centers within corporations are unaware of the overall consequences of their actions on the firm as a whole.

ethical disaster recovery

assessing organizations values anf then developing an ethics program

output controls

comparing standards with actual behavior evaluating a businesses ethics program systematically relative to its performance to determine the effectiveness.

benefit of ethics auditing

detecting misconduct before it becomes a major problem highlights trends, improves organizational learning, and facilitated communication and working relationships it helps understand the the ethical culture in an organization. relationship with stake holders will be improved. asses effectiveness of their program. -audits ensure maximum impact with the available resources improves complianc with the law and identifies potential risk and liabilites

Individualism/collectivism

how self oriented members of a culture are in their behavior. individualist place high values on individual achievement and self-interest.

Cultural dimensions

individualism/collectivism Power distance Uncertainty avoidance

formal control

input controls like -proper selection of employees, -effective ethics training -strong structural systems

Strategic Importance of Ethics Auditing

it should be conducted regularly and is not a control process to be used during a crisis. boost profit and reduces risk

Values Research

personal and organization values being compatible with each other can be a positive influence on the work place.

Ethical Disasters

recognizable phases of escalation. -Ethical issue recognition. -Decision to act unethically. -Organization's discovery of and response to the act. - identifies risk and out going problems on outgoing activityu

compliance orientation

uses legal terms, statutes, and contracts to teach employees the rules and penalties for noncompliance Linked to employees' awareness of ethical risks at work and a clear understanding of rules and expectations that facilitates decision making.

The Balanced Scorecard (measurement tool)

uses organizations elemets contributing performance and success like (financial infor, customer, market, and internal processes ROBERT KAPLAN...... USES FOUR NON FINANCIAL PERFORMANCE INDICATORS