BUAD 3270 Chapter 5

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

Utilitarianism

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

algorithms

Article 1 of Universal Declaration of Human Rights states:

all human being are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

In 1980s, western businesses questioned the ethics of operating in South Africa because this was in place and violated basic human rights.

apartheid system

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

cultural relativism

_____ are situations where none of the avalialbe alternatives seems morally acceptable.

ethical dilemmas

To ensure that the business has appropriate legal compliance programs and acts in an ethical manner, some firms now have created a positoin for a(n) __ officer.

ethics

True/False. Organizational culture refers to the system used to create job levels and hierarchies within a company.

false

True/False. Pursuing strategies that are sustainable has little impact on helping an organization ensure that ethical issues are considered in business decisions.

false

After US companies objected that the FCPA would put them at a competitive disadvantage, the Foreign Corrupt Practices Act was eventually amended to allow for _____.

grease payments

Which of Hofstede's dimensions are likely to be found in nations where corruption is epidemic?

high power distance

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

Business ethics

the belief that ethics are culturally determined and thata firms should adopt the ethics of the cultures in which they operate.

Cultural relativism

a situation in which there is no ethically acceptable solution

Ethical dilemma

enables managers to walk away from a decision that is profitable but unethical.

Moral courage

the values and norms shared among an organization's employees.

Organizational culture

a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.

Rawls' veil of ignorance

Scandinavia scores high on individualism and uncertainty avoidance measure of societal culture. According to Hofstede's dimensions of social culture, Scandianvia is more likely to engage in __ business behavior.

ethical

Article 29 of Universal Declaration of Human Rights:

everyone has duties to the communityin which alone the free and full development of his personality is possible.

Giving people that which they are due is an example of a(n) ___ distribution.

just

Drawbacks of utilitarian philosophy:

measuring the benefits, costs, and risks of a course of action and . that the philosophy omits the consideration of justice.

Basic principles and values that govern interactions between individuals are know as

personal ethics

Certain theories accpet that there are rights, both positive and negative, that all humans have simply because they are human. These are know as __ theories.

rights

Managers of ABC Manufacgturing are struggling to meet their increased quota. They decide to eliminate two quality control steps in manufacturing process. This is unethical behavior that was a result of

unrealistic performance goals

Rawls asks two fundamental principles of justice under veil of ignorance:

1. Each person is permitted the maximum amount of basic liberty compatible with a similar liberty for others. 2. Once equal basic liberty is ensured, inequality in basic social goods (income and wealth distribution and opportunities) is to be allowed only is such inequalities benefit everyone.

What management position specifically serves as an organization's internal control point for improprieties?

Ethics Officer

officers act as an internal ombudsperson with responsibility for handling confidential inquires form employees, investigating complaints from employees or others, reporting findings, and making recommendaations for change.

Ethics officers

home-country managers working abroad in multinational firms

Expatriate managers

all the other individuals and groups that have some direct or indirect claim on the firm. Group comprises primary stakeholders such as customers, suppliers, governments, and local committees as well as secondary stakeholders such as special-interest groups, committees, trade associations, mass media, and social media.

External stakeholders

Payments excluded from both the Foreign Corrupt Practices Act and the OECD convention on bribery, the ethical implications of making such payments are unclear.

Facilitating payments, or speed money

Which three actions can managers take to ensure that ethical issues are considered in business decision making?

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

which act outlaw the payment of bribes to foreign government officials to gain businesses?

Foreign Corrupt Practices Act

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

Foreign Corrupt Practices Act (FCPA

Classic straw man example." The social responsibility of business is to increase profits," so long as the company stays within the rules of law.

Friedman Doctrine

The theory that states that businesses should not incur social expenditures unless required by law or required for the efficient operations of a business is the ____.

Friedman Doctrine

Individuals or groups who work for or own the business.include primary stakeholders cush as employees, board of directs, and shareholders

Internal stakeholders

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

Just

a distribution of goods and services that is considered fair and equitable.

Just distribution

standing in the shoes of a stakeholder san aking how a proposed decision might impact that stakeholder.

Moral imagination

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

Naive immoralist

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

Naïve immoralist

In business setting, it is taken to mean benevolent behavior that is the responsibility of successful enterprises.

Noblesse oblige

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

Noblesse oblige

The values and norms shared among an organization's employees

Organizational culture

The generally accepted principles of right and wrong governing the conduct of individuals.

Personal ethics

What must a company have in order to build an organizational culture that emphasizes ethical behavior?

The business must explicitly articulate values that emphasize ethical behavior.

Six determinants of ethical behavior:

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

Best decisions form a utilitarian perspective, are those that

produce the greatest good for the greatest number of people.

The idea that business people should favor decisions that have both good economic and social consequences is called corporate ____

social responsibility

The first step to establishing a strong sense of business ethics is for a society to emphasize

strong personal ethics

Two examples of external stakeholders?

suppliers customers

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

true

True/False. The decision-making process is one of the determinants of ethical behavior.

true

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

Corporate social responsibility (CSR)

After us companies objected that the FCPA would put them at a competitive disadvantage, the Foreign Corrupt Parctices Act was eventually amended to allow for ___.

Grease payments aka facilitating or speed payments.

What characteristic helps managers walk away from a decision that is profitable, but not ethical?

Moral courage

twentieth-century theories that recognize that human being have fundamental rights and privileges that transcend national boundaries and cultures.

Rights theories

Organizational ____ is the name given to the values and norms that are shared among employees of an organizaiton.

culture

A(n) ____ strategy is a conscious and proactive use of methods that do not harm the planet, people or profits while leaving a positive impact.

sustainable

Ethics officers are responsible for:

1. Assessing the needs and risks that an ethics program must address 2. Developing and distributing a code of ethics 3. Conducting training programs for employees 4. Establishing and amintaing a confidential service to address employees' questions about issues that may be ethical or unethical 5. Making surew that the organization is in compliance with government laws and regulations 6. Monitoring and auditing ethical conduct 7. Taking action as appropriate , on possible violations 8. Reviewing and updating the code of ethics periodically.

What theories concentrate on the fair distribution of economic goods and services in a society?

Justice

Article 23 of Universal Declaration of Human Rights relates directly to employment s stating:

1. Everyone has the right to work, to free choice of employment, to just and favorable conditions of work, and to protection against unemployment. 2. Everyone, without any discrimination, has the right to equal pay for equal work. 1. Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. 2. Everyone has the right to form and to join trade unions for the protection of his interests.

Individuals or groups who work for or own the business are referred to as __ stakeholders

internal

True/False. According to the rights theories, human being ahve fundamental rights and privileges that transcend national boundaries.

true

Holds that people should be treated as ends and never purely as means to the ends of others.

Kantian ethics

__ recognizes that actions have multiple consequensces, some of which are good in a social sense and some of which are harmful.

Utilitarianism

A strategy that helps a multinational firm make a good profit, but does so without ahrming the environment while simultaneously ensuring that the ocmpany acts in a socially responsible manner toward its stakeholders is referred to as a(n) ____ strategy.

sustainable

True/False. According to the rights theories, human being have fundamental rights and privileges that transcend national boundaries.

true

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

Rawl's theory of justice Rights theories

As demonstrated by Nike in the text, which working conditions situation is generally Most preferred?

Requiring good conditions in home and foreign operations even when this results in a smaller profit margin.

a United Nations document that lays down the basic principles of human rights that should be adhered to. Adopted in 1948

Universal Declaration of Human Rights

What is the focus of the justice theories?

a fair distribution of economic goods and services

What is the focus of the justice theories?

a fair distribution of economic goods and services.

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

code of ethics

In a business setting, noblesse oblige refers to __ behavior considered to be the responsibility of successful enterprises.

benevolent

Maria's boss asked her to do whatever it takes to secure a contract. Maria knows that prying a bribe would ensure that the contract would be signed, but doesn't do this because she knows that while paying the bribe would ensure alrge profits, doing so would be unethical. Maria is demonstrating ____.

moral courage

James (from Tennessee) works at a tech support center in India. He sees his assistant manager firing one employee and hriing his neighbor at a lower rate. James confronts his assistant manager about behavior. Which philosophical approach to ethics does James represent?

righteous moralist

According to Milton Friedman, what is the social responsibility of a business?

to increase profits

The following use the Straw men approach to business ethics:

· Friedman doctrine · Cultural relativism · Righteous moralist · Naïve immoralists

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

Righteous moralists

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

Righteous moralists

a strategy, or course of action, that does not violate these accepted principle

Ethical strategy

Seven actions that an international business and its managers can take to make sure ethical issues are considered in business decisions:

1. Favor hiring and promoting people with a well-grounded sense of personal ethics 2. Build an organizational culture and exemplify leadership behaviors that place a high value on ethical behavior 3. Put decision-making processes in place that requrei people to consider the ethical dimension of business decisions 4. Institute ethics officers in the organization 5. Develop moral courage 6. Make corporate social responsibility a cornerstone of enterprise policy 7. Pursue strategies that are sustainable. 8. Code of ethics- a business's formal statement of ethical priorities.

Two assumptions taken into account to improve ethical decision making in multinational firm:

1. Too often it is assumed that individuals in the workplace make ethical decisions in the same way as they would if they were home. 2. Too often it is assumed that people from different cultures make ethical decisions following a similar process.

States that the leadership of an organization is ultimately responsible for the creation of the values, norms and practices that permeate the organization and its membership.

AIB's Motivaiton of the Code of Ethics of the Leadership

In in International Business Transactions- an OECD convention that establishes legally binding standards to criminalize bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.

Convention on Combating Bribery of Foreign Public Officials

When Byron man. decided to recycle component parts, it not only saved the company money, it also limited the amount of waste it sent to landfills. This decision reflects the idea of ____.

Corporate Social Responsibility (CSR)

In an organization where personal ethics are importatn, which individual should be hired?

The individual who has a disappointing interview despite having verified glowing letters of recommendation that attest to his integrity.

What was taking place in South Africa when the apartheid system was dominant?

There was mandated segregation between whites and nonwhites.

occurs when a resource held in common by all but owned by no one is oversued by individuals, resulting in its degradation. First named by Garret Hardin in sixteenth-century England.

Tragedy of the commons

The righteous moralist person says that a multinational's ____ country standards of ethics are the appropriate approach to follow in foreign countries.

home

The belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate.

Cultural relativism

Individuals or groups that have an interest, claim, or stake in the company, in what it does, and in how well it performs. Can be divided into internal stakeholders and external stakeholders.

Stakeholders

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

Utilitarian approaches to ethics

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

Sustainable strategies

companies moving production to location where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global commons.

Global tragedy of the commons

__ ethics measure actions on a cost-benefit scale.

Utilitarian

Which maxim accurately summarizes the concept of cultural relativism?

When in Rome, do as the Romans do.

Under this, everyone is imagined to be ignorant of all of his or her particular characteristics.

veil of ignorance