Business Ethics Exam 1
When do ethical decisions occur?
When accepted rules no longer serve and decision makers must weigh values and reach a judgment
oversight
a system of checks and balances to minimize opportunities for misconduct
interlocking directorate
concept of board members being linked to more than one company
duplicity
consumer duping a store
primary stakeholders
continued association is absolutely necessary for firm's survival
commission lying
creating a false perception with words that deceive the receiver
secondary stakeholders
don't engage in transactions with the firm, aren't essential to its survival
What are the four levels of CSR?
economic, legal, ethical, philanthropic
collusion
employee helps a consumer commit fraud
Ethical culture influences which three sectors of loyalty and trust?
employee, investor, customer
What are examples of primary stakeholders?
employees, customers, investors, governments, and communities
Define values
enduring beliefs and ideals that are socially enforced
puffery
exaggerated advertising claims, blustering, boasting
Instrumental theory
examines stakeholder relationships and describes outcomes for particular behaviors
True of sale: most decisions in business ethics are made by one individual
false
True or false: CSR means maximizing the visibility of social involvement
false
True or false: It is legal to discharge an individual as long as you give a reason
false
True or false: Stakeholders don't care if board of directors is transparent
false
True or false: The financial sector has fully regained stakeholder trust
false
True or false: a reputation is easy to quantify
false
True or false: business ethics focuses mostly on personal ethical issues
false
True or false: the most significant influence on ethical behavior is the opportunity to engage in unethical behavior
false
True or false: the trend is away form cultural or ethically based initiatives to legal initiatives in organizations
false
True or false: Fraud occurs when a false impression exists, which conceals facts
false; must be purposeful
Business can be considered a game people play. Why or why not?
false; people are not economically self sufficient and cannot withdraw from the "game" of business
Descriptive theory
focuses on actual behavior, addressing decision and strategies in stakeholder relationships
What is corporate governance?
formal system of accountability and control of ethical and socially responsible behavior by accountability, oversight, and control
accountability
how closely workplace decisions align with a firm's strategic direction
equality
how wealth or income is distributed
What are three examples of principles?
human rights, freedom of speech, justice
conflict of interest
individual must choose to advance his or her personal interests, or the organization
What is important in determining abuse?
intent
dishonesty
lack of integrity, incomplete disclosure, unwillingness to tell the truth
Board of directors rarely _______ but instead __________ ___________ ________
manage; monitor executive decisions
CI includes the collection and analysis of
markets, technology, customers, competitors, social, economic, and political trends
What is the goal of a shareholder model?
maximizing wealth for investors and owners
What are examples of secondary stakeholders?
media, trade associations, special interest groups
What is the leading form of misconduct?
misuse of company resources, mostly time theft
What are the three approaches to the stakeholder theory?
normative, descriptive, instrumental
reputation
one of an organization's greatest intangible assets with tangible value
active bribery
person who promises or gives the bribe commits the offense
passive bribery
person who receives the bribe commits the offense
guile
person who uses tricks to obtain an unfair advantage ex) lying to obtain discounts
Define morals
personal philosophies about what is right or wrong
Morals are ______ and ________
personal; singular
Normative theory
principles and values identify ethical guidelines that dictate how to treat stakeholders
Affirmative Action Programs
recruit, hire, train and promote qualified individuals from groups that have traditionally been discriminated against
What are four social responsibility issues?
social, consumer protection, sustainability, corporate governance
Define principles
specific and pervasive boundaries for behavior that should not be violated
What are three examples of values?
teamwork, trust, integrity
literally false
tests prove (establishment claims) and bald assertions (non establishment claims)
Honesty issues arise when people think _________
that normal rules do not apply to businesses
What is corporate citizenship?
the extent to which businesses strategically meed economic, legal, ethical, and philanthropic needs
control
the process of auditing and improving organizational decisions and actions
A dual relationship becomes unethical when...
the relationship causes a conflict of interest or impairment of professional judgment
Name four collaborative efforts to establish ethical behavior
EU, NAFTA, MERCOSUR, WTO
True or false: The relationship between companies and their stakeholders is a one-way street
False
True or false: There are universally accepted approaches for resolving issues
False
True or false: investments in business ethics do not support the bottom line
False
What are the six steps to implementing a stakeholder perspective?
1) assessing the corporate culture 2) identifying stakeholder groups 3) identifying stakeholder issues 4) assessing CSR 5) identifying resources and determining urgency 6) gaining stakeholder feedback
What were the results of the financial crisis?
1) decisions became more scrutinized 2) greater accountability from boards
What does a stakeholder framework achieve?
1) helps identify internal and external stakeholders 2) helps monitor and resound to needs values, and expectations of stakeholders
Three types of lies
1) joking without malice 2) commission lying 3) omission lying
What are three issues of executive compensation?
1) many boards spend more time discussing compensation than ensuring integrity of financial reporting systems 2) how closely linked is executive compensation to company performance 3) does performance linked compensation encourage executives to focus on short-term performance at the expense of long-term growth?
What are the two goals of ethical culture?
1) minimize need for enforced compliance 2) maximize utilization of principles/ethical reasoning in difficult or new situations
Name five observed misconduct practices in the workplace
1) misuse of company resources 2) harassment 3) accounting fraud 4) bribery 5) employee theft
What are the three CI models?
1) passive monitoring system for early warning 2) tactical field support 3) support dedicated to top management strategy
What are the four interrelated dimensions of corporate citizenship?
1) strong sustained economic performance 2) rigorous compliance 3) ethical actions beyond what is legally required 4) voluntary contributions to advance reputation and stakeholder commitment
What are the four right vs right dilemmas?
1) truth v loyalty 2) individual v community 3) short term v long term 4) justice v mercy
What are the three criteria of a hostile work environment?
1) unwelcome 2) severe, pervasive, and regarded by claimant as hostile 3) reasonable person would find it hostile
True or false: Ethics is as important as functional areas of business
True
True or false: ethics is a part of decision making at all levels of work and management
True
What is the definition of ethics?
comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
Ethics questions whether practices are _________
acceptable
What is ethical culture?
acceptable behavior as defined by the company and industry
implied falsity
ad that misleads, confuses, or misleads the public
What is CSR?
an organization's obligation to maximize positive impact and minimize negative impact on stakeholders
fraud
any purposeful communication that deceives, manipulates, conceals facts in order to create a false impression
optimization
the tradeoff between equity and efficiency
Facilitation payments are legal as long as _________
they're small
Ethical culture is driven by who?
top management
True or false: Business ethics deals with right or wrong
true
True or false: Many firms rewarded risk-taking
true
True or false: an ethical culture is based upon the norms and values of the company
true
True or false: individuals must separate personal interests from business dealings
true
True or false: stakeholders provide resources that are more or less critical to a firm's long term success
true
True or false: the stakeholder perspective is useful i managing social responsibility and business ethics
true
honesty
truthfulness to the best of your knowledge, or trustworthiness
integrity
uncompromising adherence to ethical values
Integrity is related to ______
virtue
When does the ethical decision making process begin?
when ethical issue awareness occurs and a discussion begins
ethical dilemma
you have to choose among several wrong choices, as there are no ethical choices