Accounting Ethics- 316
"Control" as used in this section does not refer to which of the following? A. reverence B. phrónēsis C. temperance D. Confucian self-regulation
A
A shareholder is a stakeholder who ________. A. holds stock for investment B. has a general interest in the fate of all publicly traded companies C. focuses on the means by which firms get their products to market D. always purchases the product or service of a particular company
A
Businesses today are concerned with balancing profitability with responsibility. Therefore, they should ________. A. pay attention to culture B. go beyond compliance C. hire moral people D. hire outside consultants to monitor their supply chain.
A
In On Liberty, John Stuart Mill ________. A. proposes a harm principle B. exalts libertarianism C. prescribes a consequentialist answer to ethical crises D. rejects rights
A
Protecting owners' interests was a common feature of ________. A. the Industrial Revolution B. the Information Age C. the Dodd-Frank Act D. muckraking
A
The fact that a McDonald's in Indonesia might provide sambal chili sauce to its customers rather than ketchup is as an example of ________. A. acculturation B. consumerism C. enculturation D. globalization
A
Which of the following is not an intellectual virtue according to Aristotle? A. the basic order of life B. knowledge C. wisdom D. prudence
A
Which of the following is not true? A. Shareholder primacy is the clear legal precedent in the United States. B. Maximizing shareholder profits is a legitimate goal of management. C. Dividends are paid out of corporate profits. D. Companies that pursue CSR policies can also be profitable.
A
Which of these concepts relates to utilitarianism? A. consequences B. actions C. character D. duty
A
How does humanities in ethics differ from a humanistic business model?
A humanistic business model focuses on leadership development and the data of social science about how to motivate people. Humanities in ethics looks to case methods, novels, short stories, and plays to gain insight into human behavior.
What is earth jurisprudence?
Earth jurisprudence is an interpretation of law and governance based on the belief that society will be sustainable only if we recognize the legal rights of Earth as if it were a person.
List at least five of its key stakeholder groups.
Employees, customers, management, shareholders, government, media
What is the major difference between enculturation and acculturation?
Enculturation is the process by which humans learn the characteristics, values, and rules to participate in a society more generally, whereas acculturation is the introduction of the values, worldview, philosophy, or practice of one culture into another.
True or false? Companies are required to provide amenities to their employees to fulfill the social contract between management and employees as stakeholders.
False. Amenities are additional resources made available to employees above and beyond wages, salary, or other standard benefits or obligations.
True or false? All ethical standards are relative and should be treated as such.
False. Certain core ethics exist throughout cultures and time, although they may manifest in different ways.
True or false? According to Confucius, the hope for reform of Chinese society was a centralized planning system.
False. Confucius's hope for reform was the five great relationships that support Chinese society:parent/child, husband/wife, elder/junior sibling, master/apprentice, and ruler/subject.
True or False? Globalization is evidence that business is culturally neutral.
False. Cultures often adapt to business rather than the other way around. As an example, U.S.-style jeans and baseball caps can now be found globally.
True or false? Advance permission from employees is required before they can be electronically monitored under federal law.
False. If an employer is monitoring any device owned by the company, such as a telephone or computer, no advance notice is required.
True or false? Individualism was the greatest value in Confucian ethics.
False. In Confucian ethics, the locus of ethics and moral decision making was the family rather than the individual. The most important value was the development of humanity and putting an end to anarchy, and this was done best in the context of the family.
True or false? According to Milton Friedman, a company's social responsibility consists solely of bettering the welfare of society.
False. In Friedman's view, a company's social responsibility consists of enhancing stockholder value.
True or false? The law prohibits all executives from serving in senior government posts and then leaving to go back to work for the same company in the private sector.
False. Legal restrictions exist to limit the revolving door effect, but most relate only to direct government contracting and/or lobbying.
True or false? Milton Friedman's economic philosophy advocates increased government regulation to ensure that corporations are socially responsible.
False. Milton Friedman argued that shareholders should be able decide for themselves what social initiatives to donate to or to take part in, rather than having a business executive or government decide for them.
True or false? Minimum wages are established by federal law only.
False. Minimum wage can be set by city (municipal), state, or federal governments.
True or false? Workplace drug testing is completely prohibited in some states.
False. No state completely bans drug testing. Some regulate it to make sure it is fair and accurate.
True or false? Sexual harassment is unethical but not illegal.
False. Sexual harassment is both unethical and illegal.
True or false? Corporations that embrace CSR policies consistently produce a lower rate of return on investment for shareholders.
False. Social responsibility does not mean lower profitability, as the returns on social index funds have shown.
True or false: The right to work without joining a union is controlled by federal law.
False. State laws
True or false? The United Nations Global Compact is a set of standards that is binding worldwide.
False. The UN Global Compact is a voluntary set of standards
True or false? Minimum wages have at least kept pace with the cost of living, because of the automatic cost-of-living adjustment clause in the law.
False. they have fallen far behind.
Describe the benefits of having a single ethical standard.
Having a single ethical standard maximizes ethical behavior no matter who the other party is and supports an internally consistent rule of behavior toward all family, friends, customers, clients, and others with whom we interact.
Describe a practical way to prioritize the claims of stakeholders.
In three columns, list stakeholders in order of perceived priority, their perceived interests, and the likely impact of the business decision on them. This will aid comprehension of the decision's impacts as well as provide justification for the course of conduct ultimately chosen.
Categorical Imperative
Kant's unconditional precept that we must "act only according to that maxim whereby you can, at the same time, will that it should become a universal law"; to act on the basis of good will rather than purely self-interested motives and never treat others as means toward an end without consideration of them as ends in themselves
Define localization and name at least three items that might be included as part of a localization effort.
Localization is the process of adapting a product for use or sale in other nations and cultures. This might include language translation, adapting content to the tastes and consumption habits of the local market, and converting measurements.
How does executive pay in the United States compare to that in other countries?
Most studies indicate that U.S. executives are paid much more highly than executives in other countries, including those that are very competitive with the United States. The pay ratio is approximately three hundred in the United States as compared with twenty-two in the United Kingdom and twelve in Germany.
Describe the difference between normative and descriptive ethical theories.
Normative ethical theories are philosophical theories based on reason that tell individuals how they ought to behave. Descriptive ethical theories are based on scientific evidence describing how people tend to behave in a particular context. The theories discussed in this book are normative.
Identify two benefits for a company following a policy of corporate social responsibility (CSR).
One benefit is that consumers may prefer to purchase products from a socially responsible company. A second benefit is that CSR may attract more investors, or shareholders, who are interested in investing in the company.
What Amendment was at the center of the Citizens United case? Explain.
The First Amendment and free speech: The case was a challenge to the federal elections law limiting the amount of money a person or business can spend in support of a political candidate.
What is the most important quadrant in the influence/interest matrix, and why?
The high-power, high-interest quadrant is most important because it represents stakeholders who both are highly interested in their relationship with the firm and have a high level of power or influence in the relationship.
Greenhousing
carrying out superficial CSR efforts that merely cover up systemic ethics problems for the sake of public relations
What are some of the reasons that have contributed to women making less than men in similar jobs?
discrimination, historical wage rates, and artificially manipulated job titles.
universal values
ethical principles that apply everywhere despite differences in time, geography, and culture
quan
expediency; a practical consideration of the relative rightness of options when considering a moral dilemma
Sarbanes-Oxley
legislation passed in 2002 that mandates reporting transparency by businesses in areas ranging from finance to accounting to supply chain activities
Name the three components of the triple bottom line.
people, profit, planet
Why would a company want to monitor Internet use at work?
productivity and electronic security. Managers do not want employees wasting time or exposing the company to breaches of data security, identity theft, or the legal ramifications of inappropriate or offensive behavior.
phrónēsis
prudence or practical wisdom; the intellectual virtue Aristotle considered most important
amenities
resources made available to employees in addition to wages, salary, and other standard benefits
EEOC
the Equal Employment Opportunity Commission, created by the U.S. Civil Rights Act of 1964 and which attempts to eliminate discrimination in the workplace based on race, gender, or creed
OSHA
the Occupational Safety and Health Act, which governs workplace safety, and the Occupational Safety and Health Administration, which administers the act at the federal level
Why is union membership at an all-time low?
the United States has switched from a manufacturing economy to a service economy, and the law now affords workers many of the protections they once got only through a collective bargaining agreement.
integrity
the adherence to a code of moral values implying trustworthiness and incorruptibility because there is unity between what we say and what we do
carbon footprint
the amount of carbon dioxide and other carbon compounds released by the consumption of fossil fuels
What are the two major exceptions to the Electronic Communications Privacy Act that weaken its protections of employee privacy rights?
the business purpose exception, which allows monitoring if an employer can demonstrate a legitimate business purpose for doing so, and the consent exception, which allows employers to monitor employee communications provided employees have given their consent.
business ethics
the conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment
Acculturation
the cultural transmission and socialization process that stems from cultural exchange
Merchantilism
the economic theory that global wealth is static and prosperity comes from the accumulation of wealth through extraction of resources or trade
compliance
the extent to which a company conducts its business operations in accordance with applicable regulation and statutes
collective bargaining
union negotiations with an employer on behalf of employees
sexual harassment
unwelcome touching, requests for sexual favors, and other verbal or physical harassment of a sexual nature from a supervisor, coworker, client, or customer
Should drug testing of employees be allowed?
yes, as long as a company is responsible for what its employees do. Then businesses need to check for drugs due to reasons such as workplace safety and protection of property.
How would you reconcile cultural differences between so-called contact and noncontact cultures in the context of business negotiations?
This can be a matter of managing expectations. Managers must do the work required for any business deal but deliver it in a way that is culturally sensitive, even if that means negotiating details like project deadlines and the conduct of meetings and agreeing to have different expectations of those in a different cultural context.
A distinguishing characteristic of justice theory is that it emphasizes method over content.
True
True or false: U.S. union membership today is at the lowest level since the 1950s.
True
True or false? A criticism of Immanuel Kant's categorical imperative is that its refusal ever to permit exceptions in acting ethically is impossible to observe in life.
True
True or false? According to Aristotle, happiness is a virtuous activity of the soul.
True
True or false? According to the Greek system of logic introduced by Socrates, normative ethical theories ultimately are grounded in reason.
True
True or false? Air pollution is regulated by three levels of government: local, state, and federal.
True
True or false? Confucian virtue ethics is similar to the Aristotelian version in that both are very practical.
True
True or false? Corporate social responsibility is a voluntary action for companies.
True
True or false? Family is generally a strong influence on our ethical standards.
True
True or false? If environmental harm is discovered, the business entity causing it is frequently held liable by both the government and the victims of the harm in separate proceedings.
True
True or false? Immanuel Kant contended that people often interpret reason subjectively.
True
True or false? In both East and West, the means used to achieve a certain end are often more important than the end.
True
True or false? It is possible to act deliberately and shrewdly in a good way or toward a good end.
True
True or false? John Rawls's theory of justice is mainly non-Utilitarian.
True
True or false? John Stuart Mill's emphasis on human rights distinguishes him from Jeremy Bentham.
True
True or false? Religion continues to be a forceful influence on ethical systems.
True
True or false? Stakeholder management practice ultimately is about valuing stakeholder contributions to a firm, no matter how significant, inspired, or influential that contribution might be.
True
diffused stakeholder
a stakeholder with an interest in a company's decisions and whose impacts on a firm can be large even if the relationship is generally weaker than other types
right-to-work law
a state law that says a worker cannot be forced to join a union
cap and trade
a system that limits greenhouse gas emissions by companies while allowing them to buy and sell pollution allowances
Instrumental Approach
a theory proposing that good management of stakeholders is important because it can help the bottom line
normative approach
a theory that considers stakeholders as ends unto themselves rather than means to achieve a better bottom line
social contract theory
a theory that holds the natural state of human beings is freedom, but that human beings will rationally submit to some restrictions on their freedom to secure their mutual safety and benefit
descriptive approach
a theory that views the company as composed of various stakeholders, each with its own interests
closed shop
a union environment that requires new hires to be automatically enrolled in the labor union and union dues to be automatically deducted from their pay
Fiduciary Duty
a very high level of legal responsibility owed by those who manage someone else's money, which includes the duties of care and loyalty
Ethical Relativism
a view that ethics depends entirely upon context
states' rights
a view that states should have more governing authority than the federal government, based on the Tenth Amendment, which reserves to the states any right not specifically delegated to the federal government
managerial ethics
a way of relating to self, employees, and the organization that balances individual and collective responsibility
tragedy of the commons
an economy theory highlighting the human tendency to use as much of a free natural resource as wanted without regard for others' needs or for long-term environmental effects or issues
Commerce Clause
an enumerated power listed in the Constitution giving the federal government the right to regulate commerce between states
Virtue Ethics
an ethical system based on the exercise of certain virtues (loyalty, honor, courage) emphasizing the formation of character
Consequentialism
an ethical theory in which actions are judged solely by their consequences without regard to character, motivation, or absolute principles of good and evil and separate from their capacity to produce happiness and pleasure
concept exception
an exception to the Electronic Communications Privacy Act of 1986 that allows employers to monitor employee communications provided employees have given their consent
business purpose exception
an exception to the Electronic Communications Privacy Act of 1986 that permits employers to monitor all oral and electronic communications, assuming they can show a legitimate business purpose for doing so
social contract
an implicit agreement among societal members to cooperate for social benefit; when applied specifically to a business, it suggests a company that responsibly gives back to the society that permits it to incorporate, benefiting the community at the same time that it enriches itself
stockholder
an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called shareholder
shareholder
an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called stockholder
Why is conscience the locus or center of ethical behavior in business?
because individuals acting in free association make up the business or organization. They are motivated by their inner voice to act responsibly toward each other and their stakeholders—or not.
How might consumerism be at odds with the growing concern for business ethics?
because it defines people not by their humanity but by their purchasing power
What are examples of benefits or perks that women usually value more than men?
benefits related to childcare and health care
functional stakeholder
a stakeholder whose relationships influence or govern an organization's inputs and outputs
What can a company do to try to reduce sexual harassment?
.Managers can model ethical behavior by example, and the company can offer training and communicate and strictly enforce a written policy.
Describe the challenge of identifying a universal set of ethics.
Although many agree on the importance of goals like acting with honesty and fairness and treating people as ends rather than means, their implementation is extremely complex, because people have different understandings of what is honest, fair, or an end in itself. The result may be a series of diverse rules rather than one set.
According to data presented in the chapter, about how much do women earn in comparison with men doing the same job? A. a lot less (about 40%-50%) B. somewhat less (about 70%-80%) C. almost the same (95%) D. about the same (100%)
B
Deliberative prudence does all the following except ________. A. align ends and means B. encourage prodigality C. avoid conflict D. prevent rash behavior
B
Managerial ethics is related to which of the following? A. shareholder wealth B. righteousness C. bureaucracy D. honor
B
The "veil of ignorance" ensures which of the following? A. mass delusion B. objectivity C. self-reliance D. Enlightenment reason
B
The Citizens United case ________. A. upheld existing law limiting spending on behalf of political candidates B. overturned existing law C. sent the case back to the lower court to be re-tried D. created more restrictive limits on political spending
B
Which of the following best describes the tragedy of the commons? A. People are always willing to sacrifice for the good of society. B. People are likely to use all the natural resources they want without regard to others. C. The common good of the people is a popular corporate goal. D. Tragedies occur when there is too much government regulation.
B
Which of the following is not a stakeholder? A. the media B. corporate culture C. the environment D. customers
B
How can Kantian Ethics affect the business environment?
Because Kantian ethics is about treating people not as means but as ends, this philosophy can influence nearly every aspect of business, from research and development to production, manufacturing, marketing, and consumption. It may be difficult to implement, however, because many businesses are focused on efficiency and production to the near-exclusion of other factors.
How might virtue ethics apply to contemporary business?
Because virtue ethics emphasizes individual character and conscience, it can have a tremendous influence on organizational culture by encouraging individuals to stand up for sound, ethical, and responsible business practices.
Explain why ethical responsibilities go beyond legal compliance.
Behaving ethically requires that we meet the mandatory standards of the law and then go above and beyond them to recognize that an action may be legal but we personally may consider it unacceptable. Ethical reasoning often is more topical than law and reflects the changes in consciousness that individuals and society undergo. Often, ethical thought precedes and sets the stage for changes in the law.
.Values of Protestant Christianity were often used to justify ________. A. mercantilism B. Standard Oil's overseas investments C. business success during the Industrial Revolution D. secular humanism
C
.Which of the following is true? A. Very few business executives have ever left private jobs to go into government service. B. Most government regulatory agencies are funded by donations. C. Numerous executives have left Goldman Sachs to go to work for the government. D. Few people leave government service to go into the private sector.
C
A stakeholder claim ________. A. is usually a complaint B. is always financial C. is any matter of concern for the corporation or company D. is the same as a lawsuit
C
How often should managers in a workplace anticipate an inspection from the Occupational Safety and Health Administration? A. every day B. once a month C. upon request or complaint D. never
C
Immanuel Kant objected to dogmatism in ________. A. religion B. science C. both A and B D. neither A nor B
C
In correct order, the stakeholder management steps adapted from the approach of the MITRE consulting firm are to ________. A. build trust, identify stakeholders, prioritize claims, visualize changes, and perform triage B. build trust, identify stakeholders, gather and analyze data, present results, make changes, and prepare a communication strategy C. build trust, identify stakeholders, gather and analyze data, present findings to management, and communicate key messages to stakeholders conveying the company's appreciation of them D. identify stakeholders, gather and analyze data, make changes, and present results
C
John Rawls's theory of justice is based on which of the following? A. cognitive structures B. moral duty C. social contract theory D. survival of the fittest
C
Quan means which of the following? A. adherence to the past B. philosophic tradition C. practicality D. insistence on protocol
C
The Dow Jones Sustainability Indices provides information for ________. A. investors who seek quick profit B. investors who seek long-term returns C. investors who value CSR in companies D. marketing promotions of each of its members
C
Which of the following constitutional provisions gives regulatory power to the federal government? A. First Amendment B. Tenth Amendment C. Commerce Clause D. Supremacy Clause
C
Which of the following is a potentially effective way to reduce global warming? A. build more coal-burning power plants B. build more diesel-burning cars C. implement a carbon tax D. implement tax-free gasoline
C
What is corporate social responsibility (CSR)?
CSR is the practice of viewing a business within a broader context, as a member of society with certain implicit social obligations, rather than considering the maximization of shareholder wealth as a company's sole purpose and objective.
Does the value that John Stuart Mill placed on the deliberative process and individual expression as the main ways of arriving at truth have any relevance for political debate today?
Certainly there exists a need today to engage in political debate that includes all sides of an issue in respectful ways. Mill's teaching on the role of free speech in society can be a starting point and a reminder of the importance of civil debate and freedom.
Why have some states raised minimum wages above the federal minimum?
Cost of living variations and concern about a shrinking middle class are possible motives for a state to enact its own above-federal minimum wage.
ISOs are sustainability standards for businesses ________. A. promulgated by the state government B. promulgated by the federal government C. promulgated by the World Trade Organization D. none of the above
D
In the United States, CEO pay is on average ________ times as high as the pay of the average worker in the same company. A. 30 B. 50 C. 100 D. 300
D
Industries like to be in control of their own destiny and as a result prefer self-regulation to laws imposed by governments. Self-regulation is often ________. A. based on external codes of conduct B. enforced by the courts C. in conflict with common law D. less costly for firms than government regulation
D
Maintaining trust between stakeholders and organizations is ________. A. the stakeholder's responsibility B. an ethical minimum C. an ethical maximum D. a social contract
D
The Analects of Confucius ________. A. are similar to Aristotle's Nicomachean Ethics B. represent an oral tradition C. reflect Buddhist ideals D. codify a system of virtue ethics
D
Utilitarianism is a system that ________. A. considers historical conditions B. approaches Aristotelian deliberation C. builds on natural law theory D. attempts to quantify the good
D
What are the levels upon which business ethics exists? A. compliance and governance B. federal, state, and local C. normative and descriptive D. individual, organizational, and societal
D
Which normative ethical theory supports the idea of holding multiple ethical standards? A. deontology B. utilitarianism C. virtue ethics D. none of the above
D
justice as fairness
Rawls's summary of the essence of his theory of justice
What challenges does Rawlsian justice theory present when it comes to the redistribution of goods and services in society?
Rawls's theory has been called radical because it redistributes goods and services without regard for extenuating circumstances or historical context. It also has been accused of stifling enterprise, innovation, and investment.
What did the decision in Shlensky v. Wrigley (1968) establish in ethical terms? How does it compare to the decision in Dodge v. Ford Motor Company (1919)?
Shlensky v. Wrigley gave boards of directors and management more latitude in determining how to balance the interests of stakeholders. This was in contrast to Dodge v. Ford Motor Company, which validated the rule of shareholder primacy.
Describe how a company's ethical business practices affect its goodwill.
The ethical behavior of managers has a positive influence on the value of a variety of components affecting the company's overall goodwill, including its brand, its workforce, and its customer relationships. Positive goodwill generated by ethical business practices, in turn, generates long-term business success.
Explain how the normative approach to stakeholder theory informs the instrumental aspect and the descriptive approach.
The normative approach is the fundamental basis of stakeholder theory and argues that stakeholders are ends unto themselves rather than means to an end. Thus, they have inherent value and cannot be looked at merely as instruments or as functional parts in an economic engine intended solely to generate profit for stockowners. That said, the instrumental and descriptive approaches also have their role in helping us to understand stakeholders and are mutually supportive of the normative approach.
normative stakeholder
a stakeholder in the organization's industry who influences its norms or informal rules
What are the essential differences between John Stuart Mill's version of utilitarianism and Immanuel Kant's deontology?
Utilitarianism is a consequentialist philosophy dependent solely on outcomes. Although focused on rights, Mill's utilitarianism also depends on results. Deontology is concerned with motive, duty, and one's obligation to act ethically regardless of circumstances or outcomes.
How does utilitarianism affect contemporary business practice?
Utilitarianism is pervasive in contemporary business practice, management theory, and decision-making through cost-benefit analysis. Decisions are often made based on the "bottom line" of profit, numbers of stakeholders affected, or overall utility to the organization. Utilitarianism is reflected in this abiding emphasis on efficiency, often to the neglect of other factors.
Enabling stakeholder
a stakeholder who permits an organization to function within the economic and legal system
How can wholeheartedness and sincerity serve as models of risk assessment?
Wholeheartedness and sincerity require not just competence but compassion when dealing with stakeholders and making executive decisions. Reflecting the overall Confucian concern for balance, they temper initiative and boldness with self-regulation.
Citizens United
a 2010 Supreme Court ruling in favor of unlimited spending by individuals and corporations on political campaigns
long-term perspective
a broad view of profit maximization that recognizes the fact that the impact of a business decision may not manifest for a long time
humanistic business model
a business model for balancing profitability and responsibility fairly, especially with regard to stakeholders
Limited Liability
a business owner's protection against loss of personal assets, granted with corporate status
shareholder primacy
a company's duty to maximize profits for stockholders
Codetermination
a concept popular in Europe that gives workers the right to participate on the board of directors of their company
short term perspective
a focus on the goal of maximizing periodic (i.e., quarterly and annual) profits
normative ethical theories
a group of philosophical theories that describe how people ought to behave on the basis of reason
employment at will
a legal philosophy that holds that either the employee or the employer may dissolve the employment arrangement at will (i.e., without cause and at any time unless an employment contract is in effect that stipulates differently)
Consumerism
a lifestyle characterized by the acquisition of goods and services
Sustainability
a long-term approach to the interaction between business activity and societal impact on the environment and other stakeholders
triple bottom line
a measure that accounts for an organization's results in terms of its effects on people, planet, and profits
utility function
a measure, in "utils," of the value of a good, service, or proposed action relative to the utilitarian principle of the greater good, that is, increasing happiness or decreasing pain
Deontology (Kant)
a normative ethical theory suggesting that an ethical decision requires us to observe only the rights and duties we owe to others, and, in the context of business, act on the basis of a primary motive to do what is right by all stakeholders
Utiliarianism
a normative theory of ethics suggesting that an ethical act is the one whose consequences create the greatest good for the greatest number of people
virtue theory
a normative theory that focuses on proper conduct guided by the training we received growing up
stakeholder claim
a particular stakeholder's interest in a business decision
carbon tax
a pay-to-pollute system in which those who discharge carbon into the air pay a fee or tax
Junzi
a person who is gracious, magnanimous, and cultured; a flourishing human being
Golden Mean
in Aristotelian virtue ethics, the aim of ethical behavior, a value between excess and deficiency
Original Position
in Rawls's justice theory, a hypothetical situation in which rational people can arrive at a contractual agreement about how resources are to be distributed in accordance with the principles of justice as fairness
Veil of Ignorance
in Rawls's theory, a condition in which people arrive at the original position imagining they have no identity regarding age, sex, ethnicity, education, income, physical attractiveness, or other characteristics; in this way, they reduce their bias and self-interest
unanimity of acceptance
in Rawls's theory, the requirement that all agree to the contract before it goes into effect
stakeholders
individuals and entities affected by a business's decisions, including customers, suppliers, investors, employees, the community, and the environment, among others
Eudemonia
the happiness or human flourishing that results from virtuous activity; it is more than contentment or satisfaction
Justice Theory
the idea of fairness applied beyond the individual to include the community as well as analysis of social injustice with remedies to correct it
comparable worth
the idea that pay should be based upon a job holder's worth to the organization rather than on salary history
Harm Principle
the idea that the only purpose for which the power of the state can rightly be used is to prevent harm to others
ethical minimum
the least a company might do to claim it holds an ethically positive position
Corporate Personhood
the legal doctrine holding that a corporation, separate and apart from the people who are its owners and managers, has some of the same legal rights and responsibilities enjoyed by natural persons
exigency
the level of urgency of a stakeholder claim
Moral Minimum
the minimal actions or practices a business must undertake to satisfy the base threshold for acting ethically
pay ratio
the number of times greater the average executive's salary is than the average worker's
Corporate Social Responsibility (CSR)
the practice in which a business views itself within a broader context, as a member of society with certain implicit social obligations and responsibility for its own effects on environmental and social well-being
Business Judgement Rule
the principle that officers, directors, and managers of a corporation are not liable for losses incurred when the evidence demonstrates that decisions were reasonable and made in good faith
Enculturation
the process by which humans learn the rules, customs, skills, and values to participate in a society
Stakeholder Management
the process of accurately assessing stakeholder claims so an organization can manage them effectively
Localization
the process of adapting a product for non-native environments and languages, especially in other nations and cultures
stakeholder prioritization
the process of deciding which stakeholders to focus on and in what sequence
li
the proper order of the universe and the customs and rituals that support order and harmony on Earth
moral agency
the self-awareness, freedom, and ability to make choices based on one's perception of right and wrong
corporate culture
the shared beliefs, values, and behaviors that create the organizational context within which employees and managers interact
ethics
the standards of behavior to which we hold ourselves in our personal and professional lives
ethical maximum
the strongest action a company can choose to behave ethically in a given situation
quid pro quo
the tradeoff someone makes in return for getting something of value; from the Latin meaning this for that
goodwill
the value of a business beyond its tangible assets, usually including its reputation, the value of its brand, the attitude of its workforce, and customer relations
social responsibility of business
the view that stakeholders are not the means to the end (profit) but are ends in and of themselves as human beings
What does the California Transparency in Supply Chains Act require of businesses that operate in California?
to describe for consumers all components and activities of their supply chains.
