Business Ethics Chapters 5 & 6

Organizations face certain normative pressures from different institutions to act a certain way. a. These pressures can take place internally ________________________ or ___________________

(inside the organization itself) and/or externally (from the government or other institutions).

Pluralists

(non-hedonists) take the position that no one thing is intrinsically good. a. All __________ are non-hedonists, but not all monists are hedonists because an individual can believe in a single intrinsic good other than pleasure.

Teleology

1. Refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result. 2. ____________ assesses the moral worth of a behavior by looking at its consequences, and thus moral philosophers today often refer to these theories as consequentialism

virtue

A ________ is considered praiseworthy because it is an achievement that an individual developed through practice and commitment

corporate culture

A _________ ________ can be defined as a set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share.

core values

A firm's ___________________ provide a blueprint into the firm's purpose as well as how it views ethical decision making and prioritizes stakeholders

relativism

A problem with _________ is that it emphasizes peoples' differences while ignoring their basic similarities. Research indicates that relativism is negatively related to a person's sensitivity to ethical issues

Kohlberg's model of cognitive moral development (CMD)

According to _________________________________, people pass through six cognitive moral development stages, divided into three different stages of ethical concern. (1. Punishment and obedience; 2. Individual instrumental purposes and exchange; 3. Mutual interpersonal expectations, relationships, and conformity; 4. Social system and conscience maintenance; 5. Prior rights, social contract, or utility; 6. Universal ethical principles)

leadership

An ethical organizational culture is shaped by effective _____________.

corporate culture

An individual's moral development can be influenced by ___________________ , especially ethics training. Some experts believe that experience in resolving moral conflicts accelerates an individual's progress in moral development

Virtue ethics

Argues that ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person with a "good" moral character would deem appropriate.

categorical imperative:

Deontology is greatly influenced by the philosopher Immanuel Kant's __________________________ "Act as if the maxim of thy action were to become by thy will a universal law of nature."

The three types of justice provide a framework for evaluating fairness of different situations:

Distributive justice Procedural justice Interactional justice

________ and work experience are both positively correlated with making ethical decisions

Education

intellectual skills

Equipping employees with ____________________ that will allow them to understand and resolve the complex ethical dilemmas they encounter in complex corporate cultures will help them make the right decisions

factors that result in business ethics evaluations and decisions.

Ethical issue intensity, individual factors, organizational factors, and opportunity

organization's values

In the workplace, the ____________ __________ have the greatest influence on decisions. The alignment between a person's own values and the values of the organization help to create positive work attitudes and organizational outcomes.

opportunity 2

It results from conditions that either provide rewards or fail to erect barriers against unethical behavior

hedonism

Monists are often characterized by _________ —one's pleasure is the ultimate intrinsic good or moral end.

values orientation

Organizations that have ethics programs based on a ______________ are found to make a greater contribution than those based simply on compliance, or obeying laws and regulations

White-collar crimes (WCCs)

Peer influence is a cause of ______

____________ and ________ are important normative considerations in ethical decision making.

Principles and values

Deontology

Refers to moral philosophies that focus on the rights of individuals and on the intentions associated with a particular behavior rather than on its consequences. 2. They regard certain behaviors as inherently right, and the determination of this rightness focuses on the individual actor, not society.

Questionable research practices, contradictions, and validity issues plague this theory.

Several problems with CMD relate back to its origin. These problems are termed the three hit theory. They are:

instrumentalists

Sometimes called pragmatists, _____________ reject the idea that a. ends can be separated from the means that produce them b. ends, purposes, or outcomes are intrinsically good in and of themselves

consequentialism

Teleology assesses the moral worth of a behavior by looking at its consequences, and thus moral philosophers today often refer to these theories as ________________.

ethical culture

The ________ _________ is a function of many factors, including corporate policies on ethics, top management's leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior

veil of ignorance

The _______________________ is a thought experiment that examined how individuals would formulate principles if they did not know what their future position in society would be.

Federal Sentencing Guidelines for Organizations

The focus of the _______________________________ is that all organizations should develop effective ethics and compliance programs to prevent WCC.

Kohlberg's model of cognitive moral development (CMD) 2

The model suggests that people continue to change their decision-making priorities after their formative years, and as a result of time, education, and experience, they may change their values and ethical behavior.

consistant and aggressive

The opportunity that employees have for unethical behavior in an organization can be greatly reduced through formal codes, policies, and rules that are adequately enforced by management. These mechanisms for eliminating misconduct must be __________ and __________

success

The road to success depends upon how that person defines ___________

external control

Those who believe in ________ _________ see themselves as going with the flow because that is all they can do.

internal control (internals)

Those who believe in _________ _________ believe that they control the events in their lives by their own effort and skill and trust in their capacity to influence their environment.

significant others

Those who have influence in a work group, including peers, managers, coworkers, and subordinates, are referred to as __________ ___________.

monism and pluralism

Two basic concepts of goodness are __________ and ______________

socially responsible.

When values from political, economic, and social institutions are embedded into the organizational culture to provide incentives for appropriate behavior, firms tend to act more _____________________.

Research on age and ethical decision making reveals a complicated relationship. __________ managers are far more influenced by organizational culture than are older managers.

Younger

Moral intensity

________ _________relates to a person's perception of social pressure and the harm the decision will have on others.

Realism, realists, realistic

________ is the view that an external world exists independent of our perceptions. __________ assume that humankind is not naturally benevolent and kind but instead is inherently self-centered and competitive. 1. Research shows there is a negative correlation between __________ thinking and ethical decision making

Guilt or uneasiness

________ or ___________ is the first sign that an unethical decision has occurred. This feeling occurs when a person's behaviors are inconsistent with ethical judgment

Distributive justice

__________ ___________ is based on the evaluation of outcomes or results of the business relationship.

Egoism

__________ defines right or acceptable behavior in terms of the consequences for the individual. They believe in making decisions to maximize self-interest.

idealism

__________ is a moral philosophy that places special value on ideas and ideals as products of the mind. There is a positive correlation between _________ thinking and ethical decision making.

Obedience to authority

___________ ___ ____________ helps to explain why many employees resolve business ethics issues by simply following the directives of a superior. In organizations that emphasize respect for superiors, employees may feel that they are expected to carry out all orders from a supervisor

Enlightened egoists

___________ ____________ take a long-range perspective and allow for the well-being of others, although their own self-interest remains paramount

Opportunity

____________ describes the conditions in an organization that limit or permit ethical or unethical behavior

John Rawls

____________ was one of the most influential philosophers in his research on how principles support the concept of justice

Procedural justice

_____________ __________ is based on the processes and activities that produce the outcome or results

Utilitarianism

______________ seeks the greatest good for the greatest number of people. Utilitarians look for the greatest total utility, or benefit, that can come of a decision using cost/benefit comparisons of all affected parties.

Core values 2

_______________ provide the abstract ideals that are distinct from individual values and daily operational procedures

Value practices

_________________ evolve and are translated into normative definitions of ethical or unethical

Act utilitarianism

_________________ examines a specific action itself, rather than the general rules governing it.

Social institutions

_________________ include religion, education, and individuals such as the family unit.

Rule utilitarianism

___________________ determines behavior on the basis of principles, or rules, designed to promote the greatest utility

Economic systems

____________________ within a society influence, and are influenced by, the actions and beliefs of individuals (morals) and of society (laws) as a whole.

Qualitative hedonists

_____________________ are those who believe that it is possible to get too much of a good thing

nonconsequentialism

a system of ethics based on respect for persons

virtue ethics 2

a. A virtue is considered praiseworthy because it is an achievement that an individual developed through practice and commitment. 2. Individual virtue and integrity count, but good corporate ethics programs encourage individual virtue and integrity. 3. By the employee's role in the community (organization), these virtues form a good person. 4. The ultimate purpose is to serve society's demands and the public good and to be rewarded in one's career. 5. The well-being of the community goes together with individual excellence. 6. The elements of virtue most important to business transactions are trust, self-control, empathy, fairness, and truthfulness. a. Critics of virtue ethics argue that virtue is an unattainable goal, but virtue ethicists believe in the universality of the elements of virtue.

Political institutions

a. __________ ____________ influence the development of values as organizations must comply with these types of institutional norms and belief systems to succeed. i) ________ __________ can also take place within the organization. ii) An ethical organization has policies and rules in place to determine appropriate behavior. iii) This is often the compliance component of the firm's organizational culture. iv) Failure to abide by these rules results in disciplinary action.

Competition

affects how a company operates as well as the risks employees take for the good of the firm.

Moral philosophies 2

are ideal moral perspectives that provide individuals with abstract principles for guiding their social existence.

Moral philosophies

are person-specific, whereas business ethics is based on decisions made by groups or when carrying out tasks to meet business objectives.

Quantitative hedonists

are those who believe that more pleasure is better

Normative relativism

assumes that one person's opinion is as good as another's. i) The relativist observes the actions of members of an involved group and attempts to determine that group's consensus on a given behavior. A positive consensus signifies that the group considers the action to be ethical.

Normative business ethics

b. __________________ takes into account the political realities outside the legal realm in the form of industry standards. i) Legal issues such as price fixing, antitrust issues, and consumer protection are important in maintaining a fair and equitable marketplace. ii) Because of their impact on the economy, these issues must be major considerations for businesses when making ethical decisions.

Rule deontologists

believe that conformity to general moral principles based on logic determines ethicalness

Deontologists 2

believe that individuals have certain absolute rights, including a. freedom of conscience b. freedom of consent c. freedom of privacy d. freedom of speech e. due process

Monists

believe that only one thing is intrinsically good, and pluralists believe that two or more things are intrinsically good.

Milton Friedman

believed that the market would reward or punish companies for unethical conduct without the need for government intervention, but free markets will not solve all problems

ethical diversity

c. Individual and organizational values can differ significantly because of ________________ among individuals

Ethical issue intensity

can be defined as the relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization

Normative approaches

concern how organizational decision makers should approach an issue

______ ________ are central to an organization and provide direction for action. By incorporating stakeholder objectives into corporate _____ ________, companies begin to view stakeholders as significant.

core values

For some employees, business ethical issues may not reach __________ __________ if managers fail to identify and educate them about specific problem areas.

critical awareness

John Rawls 2

developed two main principles of justice: i) The liberty principle, also known as the equality principle, states that each person has basic rights that are compatible to the basic liberties of others. ii) The difference principle states that economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society.

White-collar crimes (WCCs)

do more damage in monetary and emotional loss in one year than the crimes of the street over several years combined. A __________ is a "non-violent criminal act involving deceit, concealment, subterfuge and other fraudulent activity."

It is thought that those more familiarized with the ethical decision-making process due to _________ or ________ are likely to spend more time examining and selecting different alternatives to an ethics issue.

education or experience

Obligation theories

emphasize the means and motives by which actions are justified. These obligation theories are teleology and deontology, respectively.

descriptive approach

examines how organizational decision makers approach ethical decision making.

two types of locus of control

external internal

Concepts like _______ and _______ are highly important in a normative structure

fairness and justice

rewards for meeting performance goals and the corporate culture

have been found to be the most important drivers of ethical decision making, especially for coworkers and managers

Act deontologists

hold that actions are the proper basis on which to judge morality or ethicalness

The amount of competition in an industry can be determined and described according to:

i) Barriers to entry into the industry. ii) Available substitutes for the products produced by the industry rivals. iii) The power of the industry rivals over their customers. iv) The power of the industry rivals' suppliers over the industry rivals.

stakeholders

iii) While we might not consider _______________ to be institutions, it should be clear that many _________________ actually act as institutions in terms of values.

The ___________ of an ethical issue relates to its perceived importance to the decision maker.

intensity

While we still cannot be certain how significant locus of control is in terms of ethical decision making, one study found that _________ were positively correlated to ethical decision making while ___________ were negatively correlated.

internals externals

economic value orientation

is associated with values that can be quantified by monetary means. If an act produces more value than its effort costs, then it should be accepted as ethical.

Interactional justice

is based on the relationships between organizational members, including the way that employees and management treat one another.

Ethical awareness

is the ability to perceive whether a situation or decision has an ethical dimension.

Justice

is the fair treatment and due reward in accordance with ethical or legal standards, including the disposition to deal with perceived injustices of others.

Nationality

is the legal relationship between a person and the country in which he/she is born. Culture differences may contribute to differing value systems

The ________ of ethical issue intensity can be influenced by management's use of rewards and punishments, corporate policies, and corporate values to sensitize employees

perception

institutions can be sorted into three categories

political, economic, and social.

Meta-ethical relativism

proposes that people naturally see situations from their own perspectives and argue that there is no objective way of resolving ethical disputes between different value systems and individuals

Moral philosophy

refers to the specific principles or values that people use to decide what is right or wrong They are guidelines for "determining how conflicts in human interests are to be settled and for optimizing mutual benefit of people living together in groups."

Deontologists

regard the nature of moral principles as permanent and stable, and they believe that compliance with these principles defines ethicalness

Locus of control

relates to individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements.

Descriptive relativism

relates to observing cultures

People often base their decisions regarding ethical issues on their own values and principles of right or wrong. These values are subjective and can vary across cultures. They generally learn these values and principles through the ________________________________.

socialization process with family members, social groups, religion, and in their formal education

White-collar criminals

tend to be highly educated people who are in positions of power, trust, respectability, and responsibility within a business or organization.

First Step in ethical decision making

to recognize that an ethical issue requires an individual or work group to choose among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong

The elements of virtue most important to business transactions are

trust, self-control, empathy, fairness, and truthfulness.

Goodness theories

typically focus on the end result of actions and the goodness or happiness created by them.

immediate job context

where they work, with whom they work, and the nature of the work.

Research on gender and ethical decision making shows that in many aspects there is no difference between men and women, but when differences are found, ________ are generally more ethical than males.

women

What are the six "spheres of influence" that Individuals are subject to when confronted with ethical choices? the level of importance of each of these influences will vary depending on how important the decision maker perceives the issue to be.

workplace, family, religion, legal system, community, and profession

Adam Smith

—the father of free-market capitalism—believed business was and should be guided by the morals of good people.