Chapter 4

If a company has a code of ethics and managers still act unethically, this increases the likelihood that lower-level employees may:

Act unethically also.

Justice Rule -

An ethical decision is a decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way.

Moral Rights Rule -

An ethical decision is one that best maintains and protects the fundamental or inalienable rights an privileges of the people affected by it. Managers consideration of peoples rights to freedom, life, safety, property, privacy, and free speech.

Ethical Values:

Are utilized by managers when faced with ethical dilemmas to make good decisions, to strengthen a company's organizational culture.

It is important to punish unethical behavior because:

As an incentive for others in the organization to consider the rights of all stakeholders.

Laws and Ethics are:

Changing principles

Mangers primary concern as a stakeholder group:

Deciding on a company's goals and how to use its resources.

Stakeholders -

Employees, customers, suppliers, and distributors, and the community are all affected by the way a company and its managers behave

Utilitarian Rule -

Ethical decision are those that produce the greatest good for the greatest number of people. When they use this rule, manager try to choose the option or behavior that causes the greatest good or the least harm for stakeholders.

Managers serve as:

Ethical role models to employees.

Individuals face moral dilemmas because _____ _____ and _____ are relative.

Ethics Values Laws

Unethical behavior can ruin business commerce, which in turn can lower a society' standard of living because:

Fewer goods and services are produced.

Efficiency an effectiveness:

From managers and employees create loyal customers and attract new ones.

Advantages of increased social responsibility:

Improved organizational reputation Increased business and rising profit Improved quality of life for stakeholdersfgygf

Societal Ethics -

Involve standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual. Vary among countries and develop out of a culture's laws, customers, practices, and unwritten norms of behavior.

A good reputation:

Is a possible indication of high ethical standards.

Ethics and legality:

Just being legal does not make an action ethical.

A community provides a company with:

Labor force Utilities Homes for employees Social infrastructure

Company Credos -

Make clear that those who act unethically will be punished.

Stockholders -

Owners of stock in a company.

Individual and Inner Ethics:

Personal standard san values that determine how people view their responsibilities to others and how they should act in situations when their own self-interests compete with the interests of others.

Individual Ethics -

Personal standards and values that determine how people view their responsibilities to other people and groups and how they should act in situation where their own self-interest are at stake.

Form their employers, employees can reasonably expect to:

Receive compensation consistent with their performance Be paid the same as other employees, given all other factors being equal Be treated fairly

Managers have a claim on an organization because they bring it to their _____ _____ and _____

Skills Expertise Experience

Practical Rule -

Suggests communicating the decision to people outside the company.

A company can act ethically toward employees and meet their expectations by creating an organizational structure...

That fairly and equitably rewards employees.

Reputation -

The esteem that individuals or organizations gain when they behave ethically.

Organization Ethics -

The guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders.

Ethical Ombudsman -

The individual who is responsible for monitoring conformity to ethical standards and investigating ethical breaches. Have the authority to look into ethical problems organization-wide.

Ethics -

The inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the "right" or "wrong" way to behave.

One major challenge to ethical decision making is:

The lack of absolute rules.

Ethical Dilemma -

The quandary people find themselves in when they have to decided if they should act in a way that might help another person or group even though doing so might go against their own self-interest.

Managers -

The stakeholder group responsible for choosing the strategic goals the company should peruse in order to benefit all of the company's stakeholders.

Occupational Ethics -

The standards that given how members should conduct themselves when performing work-related activities.

Social Responsibility -

The way a company views its obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society.

Trust -

The willingness of one person or group to have faith or confidence in the goodwill or another person, even though this puts them at risk.

Reasons that organizations create Company Credos:

To deter self-interested, unethical behavior To demonstrate that the company will not tolerate people who put their own personal interests above those of the company's stakeholders To ensure that everyone knows that those who act unethically will be punished

Ethical Dilemma for managers:

Wanting to treat all stakeholders equally, but in reality they need to prioritize the treatment of the various stakeholder groups.

Defensive example:

When managers are granted large stock options and bonuses even as company performance declines rapidly.

Accommodative example:

When managers at older and more reputable companies, with much to lose, dissuade employees from acting unethically even when it would ensure their competitive advantage.

Obstructionist example:

When managers knowingly seek to hide evidence from the public, such as that asbestos and/or tobacco causes lung cancer.

Proactive example:

When managers seek ways to reduce operation costs to prevent layoffs to enable them to keep promises they make to employees.

Effects of trust among stakeholders:

When one stakeholder acts in a trustworthy manner, others tend to follow Stakeholders cooperate in providing information Company performance improves