Chapter 3 Ethics and Social Responsibility Lanelle Chase

Values

are the underlying beliefs and judgments regarding what is right or desirable that influence individual attitudes and behaviors.

describe the stakeholder model

Asserts that managers have a duty to both the corporation's shareholders and "individuals and constituencies that contribute, either voluntarily or involuntarily, to a company's wealth-creating capacity and activities, and who are therefore its potential beneficiaries and/ or risk bearers." Hence, according to the stakeholder theory, managers are agents of all stakeholders and have two responsibilities: to ensure that the ethical rights of no stakeholder are violated and to balance the legitimate interests of the stakeholders when making decisions.

describe the shareholder model

Asserts that the manager's primary responsibility and duty is to maximize shareholder returns. Thus, the shareholder theory asserts that because shareholders advance capital to a company's managers, the managers' responsibility only extends to the expenditure of corporate funds in ways that have been authorized by the shareholders.

what is a whistle blower

A whistle-blower is anyone who has and reports insider knowledge of illegal activities occurring in an organization.

In moral development what are the 4 theories

Ethical Egoism Theory Ethical egoism holds that we all act in our own self-interest and that all of us should limit our judgment to our own ethical egos and not interfere with the exercise of ethical egoism by others. Moral Sentiments Theory Adam Smith, a philosopher and economist, wrote, in The Theory of the Moral Sentiments, that humans are rational and understand that fraud is in no one's self-interest, not even that of the perpetrator, who might benefit temporarily until federal and state officials prosecute them Divine Command Theory The divine command theory is an approach that incorporates religious perspectives in resolving ethical dilemmas. Virtue Ethics Theory Aristotle and Plato taught that in order to solve ethical dilemmas there must be some element of personal development. Individuals are in a position to solve ethical dilemmas once they develop a set of virtues.

The Ferrell ethical decision-making framework considers four factors when evaluating ethical dilemmas which are :

Ethical issue intensity is the perceived relevance or importance of an ethical issue to the individual, work group, and/or organization. Individuals can be subject to six spheres of influence: 1) workplace, 2) legal system, 3) family, 4) community, 5) religion, and 6) profession. Individual factors: People base their ethical decisions on their own values and principles of right or wrong. Values are learned through socialization. Organizational factors Organizational culture has a stronger influence on employees than individual values. Opportunity is the conditions within an organization that limit or permit ethical or unethical behavior.

Ethical Perspectives

Ethical perspectives provide a philosophical basis for evaluating behavior and decision- making and there are four major ethical views

what are ethics?

Ethics are defined as the codes of moral principles that set standards of "right" and "wrong" in our conduct.

describe the its not really illegal rationalization

Ethics is far broader than law, which is a system of behavior enforced by the state with penalties for violations. Ethics is good conduct as determined by the values and customs of society. Professions promulgate codes of ethics precisely because the law cannot proscribe all inappropriate or harmful behavior. Much that is unethical is not illegal. Lying. Betrayal. Nepotism.

give an example fo social responsibility

For example, Honda introduced the first hybrid car in North America and has long been an industry leader in fuel efficiency. So when Honda decided to enter the private-jet market with their new Honda Jet, they followed the same approach to efficiency and environmental technology by constructing a plane out of lightweight composites and utilizing engines that are both powerful and fuel efficient. Honda believes that its approach to being socially responsible is key in its design and in making the Honda Jet profitable.

Give an example of an overt integrity test

For example, an applicant may be asked "Would you ever consider buying something from someone if you knew that it had been stolen?" or a general question, such as "Don't you feel that most people steal from their companies?"

What is ethical climate

It is both the setting in which all the multiple large and small transactions of the groups and individuals involved in the firm take place and the net effect of all those transactions.

Describe the 6 stages of Moral development

In Stage 1 of the preconventional phase, the punishment and obedience stage, your primary concern will be to avoid trouble for yourself, so you won't copy software because you are afraid of being caught and punished. However, in Stage 2 of the preconventional phase, the instrumental exchange stage, you're less worried about the punishment and more concerned about advancing your own wants and needs. Hence, you copy the software. Stage 3 is influenced by what the "good people" are doing. If everyone else is copying software illegally, you will too. But if they aren't, you won't either. Stage 4 is the law and order stage; again, you look externally for guidance and do whatever the law permits: since it is illegal, you won't copy the software. Stage 5 is the social contract stage, wherein your decision is based on the overall rights of others: society as a whole is better off when individual rights are protected—in this case, the rights of the software authors and manufacturers. Hence, you do not copy the software. In Stage 6, the universal principle stage, you may or might not copy the software, depending on your principles of right and wrong. In fact, you will stick to your principles even if your decision conflicts with the law (Stage 4) or what others believe is best for society (Stage 5).

There are four common rationalizations that are used to justify ethical misconduct

It's not really illegal Everyone does it No one will ever know about it it's for a good cause

What are the three informational subroles

Monitor: involves actively seeking and obtaining a wide variety of information, both internally and externally, to develop a thorough understanding of the organization and its environment. Disseminator: managers share information they have received from outsiders or from other subordinates to members of the organization. Some information is factual; however, some information may involve management's interpretation and integration of other pertinent information in order to make managerial decisions. Spokesman: in this role, managers share the information (plans, policies, results, etc.) within and outside of the organization and may also serve as experts on the organization's industry.

describe the no one will ever know about it rationalization

One might as well say it didn't happen, so you can't really say anything really was wrong, right? Wrong. First of all, a remarkable percentage of time, the wrongful act is discovered. Even if it is not, however, the unethical nature of the act is intrinsic and exists independently of how many people know about it. Just as a tree that falls in the forest with nobody around both makes noise and causes damage, undetected, well-disguised, or covered-up wrongs are exactly as wrong as those that end up on the front pages.

3 levels of moral development

Phase One—The preconventional level of moral development: people make decisions based on selfish reasons. Phase Two—The conventional level of moral development: people at this phase of moral development make decisions that conform to societal expectations, looking outside of themselves to others for moral guidance on ethical issues. Phase Three—The postconventional level of moral development: at this phase of moral development, people use internalized ethical principles to solve ethical dilemmas.

Three aspects of the justice view

Procedural justice refers to the idea of fairness and transparency in the processes that resolve disputes and allocate resources Distributive justice involves the perceived fairness of the allocation of outcome without respect for individual characteristics such as ethnicity, race, age, or gender. To determine whether distributive justice has occurred, individuals often seek the distributive "norm" of their group. A distributive norm is the standard of behavior that is required, desired, or designated as normal within a particular group (e.g., length of employment with the company). Interactional justice focuses on the interpersonal treatment of others with dignity and respect when procedures are implemented. For example, does a bank loan officer take the time to fully explain to an applicant why he or she was denied a loan?

The 4 types of work place deviance

Production deviance Property deviance political deviance personal deviance (aggression)

production deviance

Production deviance is exhibited when workers leave early ,take excessive work breaks, waste resources, or intentionally work slowly. These actions have a negative effect on both quality and quantity of the work produced.

Property deviance

Property deviance is unethical behavior that is focused toward the company's property or products. Examples of such behavior include stealing (employee shrinkage), damaging equipment or products, sabotaging equipment or products, and overcharging for products or services and pocketing the difference.

The Baird decision-making framework examines ethical situations through four lenses which are:

Rights Lens: An action is ethical if I fulfill my duties and do the right thing as I claim my individual rights. Relationship Lens: An action is ethical if it supports a framework for continuous systemic ethical improvement for both the organization and the institutions supporting it. Results Lens: An action is ethical if good ends and good results come from the action. Reputation Lens: An action is ethical if it is consistent with the habitual development of sound character traits, including habits of thoughtful reflection, good intentions, and noble human virtues.

what determines acceptable behavior in business?

Stakeholders—including employees, customers, government regulators, special interest groups, communities, and competitors—and an individual's personal morals and values determine what acceptable behavior in business is.

An ethical dilemma occurs when

a person has the ability to make two choices but can only perform one or the other.

personal deviance (aggression)

The final type of deviance is personal deviance (aggression); examples include sexual harassment, verbal abuse, workplace violence, stealing from coworkers, and personally threatening coworkers.

What are the 6 factors of the ethical intensity of a decision

The first factor is magnitude of consequences. Magnitude of consequence is the total harm or benefits accruing to individuals affected by a decision or behavior. The second factor is probability of effect—the likelihood that if a decision is implemented, it will lead to the harm or benefit predicted. The third factor, social consensus, is the amount of public agreement that a proposed decision is bad or good. The fourth factor is temporal immediacy—the length of time that elapses between making a decision and when the consequences of that decision are known. The fifth factor, proximity of effect, is the sense of closeness (social, cultural, psychological, or physical) that the decision maker has to victims or beneficiaries of the decision. The sixth factor is concentration of effect—the inverse function of the number of people affected by a decision.

The second option in testing applicants' integrity is the personality-based integrity test. which tests what?

These written tests indirectly estimate the honesty of the applicants by measuring psychological traits such as depend- ability and conscientiousness.

rationalize the it's for a good cause rationalization

This rationalization has probably caused more death and human suffering than any other. The words "it's for a good cause" have been used to justify all sorts of lies, scams, and mayhem. It is the downfall of the zealot, the true believer, and the passionate advocate that almost any action that supports "the cause," whether it be liberty, religion, charity, or curing a plague, is seen as being justified by the inherent rightness of the ultimate goal at any price.

describe the everyone does it rationalization

This rationalization is based on the flawed assumption that the ethical nature of an act is somehow improved by the number of people who do it, and if "everybody does it," then it is implicitly all right for you to do it as well: cheat on tests, commit adultery, lie under oath, use illegal drugs, cheat on taxes. Of course, people who use this "reasoning" usually don't believe that what they are doing is right because "everybody does it." They are usually arguing that they shouldn't be singled out for condemnation if "everybody else" isn't.

political deviance

Using one's influence to harm others in the company by showing favoritism rather than performance, spreading rumors about coworkers, or blaming other for mistakes they didn't make are examples of political deviance.

Describe the differences of Corporate social responsibility and business ethics

While CSR encompasses the economic, legal, ethical, and discretionary responsibilities of organizations, business ethics usually focuses on the moral judgments and behavior of individuals and groups.

Who can be a whistle blower?

Whistle-blowers can be employees, suppliers, contractors, clients, or any individual who somehow becomes aware of illegal activities taking place in a business, either through witnessing the behavior or being told about it.

An ethical issue

an identifiable problem, situation, or opportunity that requires a person or organization to choose among several actions that may be evaluated as ethical or unethical.

Personal ethics

are guides for our behavior that help us make moral choices among alternative courses of action.

Terminal values

are the goals that we work toward and view as most desirable.

When addressing an issue of high ethical intensity, managers are more..

aware of the impact their decision will have on others.

Managers' decisions often require what?

balancing monetary profit or personal interests against what the individual, work group, or organization considers to be honest and fair.

Instrumental values

concern the means for accomplishing these ends. Instrumental values are core values and are thus permanent in nature.

The justice view of moral reasoning...

considers behavior ethical when people are treated impartially and fairly according to legal rules and standards.

The individualism view of ethical behavior...

contends that acts are moral when they promote the individual's best long-term advancement of self-interests. For example, suppose that you might think about cheating on the next exam. However, you realize that this short-term gain might lead to a long-term loss if you get caught and fail the course. For this reason, you reject the idea.

The second objective of ethics training is to achieve what?

credibility with employees. Employees often complain that outside instructors and consultants are teaching theory that has nothing to do with their jobs and the practical dilemmas they are facing.

What does social responsibility entail?

entails developing businesses with a positive relationship to the society in which they operate

Every code of ethics is different and should reflect the company's

ethos, values, and business style.

True or false Corporate social responsibility is the same as business ethics

false Corporate social responsibility is related, but not identical, to business ethics.

True or False all ethics codes are the same size

false Some codes are short, setting out only general guidelines, and others are large manuals encompassing a huge variety of situations.

(True or False)Psychologist Lawrence Kohlberg's research did not lead him to define the stages of moral development.

false it dead lead to define the stages

(True or false) Critics of the universalism approach claim that it is not a form of ethical imperialism that attempts to externally impose one's ethical beliefs and standards on others.

false they claim that it is a form go ethical imperialism

Preparing employees to face ethical dilemmas is one of the main benefits of work ethics training. It provides employees with...

framework for decision- making and an understanding of the company's expectations of them.

A well-written code of ethics should also give...

guidance to employees on how to deal with certain ethical situations.

The first objective in ethics training is what?

guiding employees into making more ethical decisions. Even when not faced with a large ethical dilemma, decisions requiring a solid foundation in ethics are made on a daily basis.

Overt integrity tests estimate job applicants' what?

honesty by asking them directly what they think or feel about theft or about punishment or unethical behavior.

The moral rights view asserts that...

human beings have fundamental rights and liberties that cannot be taken away by an individual's decision. Thus, an ethically direct decision is one that best maintains the rights of those people affected by it.

4 Perspectives of Corporate Social Responsibility

inherence school of thought enlightened self-interest school of thought he invisible hand school of thought According to the social responsibility school of thought

Workplace deviance

is defined as the unethical behavior that violates the organizational norms of what is right and wrong and can range from serious to minor and by the target of the deviant behavior— either the organization or particular people in the workplace. These are the four dimensions with examples of workplace deviance

Ethical intensity

is the degree of moral importance given to an issue.

invisible hand school of thought

is the opposite of enlightened self- interest. According to this philosophy, business ought to serve the larger society, and it does this best when it serves the shareholders only.

Ethical behavior

is the term often used to describe what we accept as "right" or "wrong" or "good" or "bad."

Cultural relativism what is it?

is the view that no culture is superior to any other culture when comparing systems of morality, law, politics, etc. This view considers that all cultural beliefs are equally valid and that truth itself is relative, depending on the cultural environmen

The concept of corporate social responsibility (CSR) means what?

it means means that organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law.

Professor L. Hosmer has identified seven different ethical principles that managers use to make business decisions and they are...

long-term self-interest religious injunctions government requirements individual rights personal virtue distributive justice utilitarian benefits.

Southwest Airlines is one example of an organization with clearly defined instrumental values that significantly contribute to its overwhelming success. Some of Southwest's instrumental values are...

low cost, hard work, family, fun, individuality, ownership, and profitability.

According to the inherence school of thought

managers answer only to shareholders and act only with shareholders' interests in mind. This type of manager would not become involved in any political or social issues unless it was in the shareholders' best interests to do so, provided the involvement did not backfire.

The principle of religious injunctions follows the belief that...

managers should never take an action that is unkind or that harms a sense of community, such as the positive feelings that come from working together to accomplish a commonly accepted goal.

The principle of long-term self-interest states that

managers will not make a decision that is not in the organization's long-term self-interest —for example, the decision to sell a product with known defects as an effort to reduce costs and increase profits versus the long-term effect of lost customer sales due to a poor-quality reputation.

According to the principle of government requirements...

managers' decisions are founded on the minimal moral standards of society; as such, managers should never take any action that would be in violation of the law because the law represents the minimal moral standard of society.

The principle of personal virtue is an ethical principle that holds that you should...

never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV.

The final principle of utilitarian benefits is the ethical principle that holds that you should

never take any action that does not result in greater good for society; as such, you should do whatever creates the greatest good for the greatest number of people.

The principle of distributive justice is the ethical principle that holds that you should...

never take any action that harms the least fortunate among us in some way. This ethical principle is designed to protect the poor, the uneducated, and the unemployed

The ethical principle of individual rights holds that managers should

never take any action that in- fringes on other's agreed-upon rights. Rights are the fundamental normative rules about what is allowed of people or owed to people according to some legal system, social convention, or ethical theory.

An organization's ethical culture must be instilled in every employee. For many companies, ethics is a key component of???

of the employee screening and hiring process.

Business ethics

refers to principles, values, and codes of conduct that define acceptable behavior in business.

There are two perspectives regarding to whom organizations are socially responsible list both

shareholder model stakeholder model

Universalism what is it?

suggests that if a behavior or practice is not acceptable in one's home country, it is not acceptable anywhere else.

Psychologist Milton Rokeach delineates two types of values

terminal and instrumental

The Utilitarian view considers...

that ethical decisions should be resolved by delivering the greatest good to the greatest number of people as long as the majority of those involved are helped and a minimum number are harmed. An example is a manager who decides to cut the workforce by 30% in order to keep the company profitable and save the remaining jobs rather than lose them all to a business failure.

Following the enlightened self-interest school of thought

the manager is responsible to the shareholders but serves them best by being responsive to a larger society. Enlightened self-interest is based on the view that business value is enhanced if it is responsive to the needs of society because it enables a quality workforce.

The defining point between an issue and an ethical issue is

the point at which accepted rules no longer serve and the decision maker is faced with the responsibility for weighing moral rules and making a choice

what Six moral rights should be considered during decision-making?

the right of free consent: Individuals are to be treated only as they knowingly and freely consent to be treated. The right to privacy: Individuals can choose to do as they please away from work and have control of information about their private life. he right of freedom of conscience: Individuals may refrain from carrying out any order that violates their moral norms and religious norms. The right of free speech: Individuals may criticize truthful ethics or the legality of actions of others. The right to due process: Individuals have a right to an impartial hearing and fair treatment. The right to life and safety: Individuals have a right to live without endangerment or violation of their health and safety.

According to the social responsibility school of thought

the role of business is to serve the larger society, and that is best accomplished by being responsive to the larger society. This view is simply a reflection of the idea that businesses profit by being responsive to society and its needs.

(True or false) In an ethically intense situation managers are more likely to view the decision as an ethical or moral decision than as an economic decision and, as such, more likely to worry about doing the right thing.

true

(true or false) An ethical climate is not a thing but a process

true

(true or false) How we view ethics in the United States is often at odds with how people view ethics in other parts of the world.

true