FAU Business Law Chapter 2

Top Management Attitudes (List them)

1. A manager who is not totally committed to an ethical workplace rarely succeeds in creating one. 2. Management's behavior set the ethical tone for an organization. 3. Employees tend to follow what they perceive to be management's lead. 4. Managers must model ethical behavior for their employees. 5. Managers who set unrealistic sales or production goals will increase the probability that employees will act unethically. 6. Managers should set realistic goals for their employees to reduce the incentive to "cheat" in order to achieve management's goals. 7. Managers who look the other way when an employee acts unethically conveys the message that unethical behavior is acceptable to the organization.

Making Ethical Business Decisions

1. The Law: Is the action you are considering legal? 2. Rules & Procedures: Are you following the internal rules & procedures that have been laid out by your company? 3. Values: Laws & internal company policies reinforce society's values. 4. Conscience: If you feel guilty, let your conscience be your guide. 5. Promises: Every business organization is based on trust. 6. Heroes: Everyone has heroes that act as role models.

Ethical Dilemma

A problem about what a firm should do for which no clear, right decision is available.

Utilitarianism

An action is ethical based on whether it produces the greatest good for the greatest number of people upon which it has an effect.

Short run profit maximization

An overemphasis __________ is the most common reason that ethical problems manifest in business.

Duty Based Ethics

Based upon an underlying concept of performing an action or refraining from performing an action. Generally arise from religious beliefs or philosophical reasoning.

Long term profit maximization

Business Ethics is consistent with ____________.

Ethics Training

Businesses with and without formal codes of conduct should talk with employees about ethical behavior and should consider in-house or out-sourced ___________.

Corporate Watch Groups

Can hold corporations accountable through adverse publicity.

Stakeholder Approach

Corporations have a duty not just to shareholders but to other groups affected by corporate decisions ("stakeholders").

Importance of Business Ethics

Directors and Officers owe a complex set of duties to all of their stakeholders. When these duties conflict ethical dilemmas are created.

Religious Ethical Standards Kantian Ethics The Principle of Rights

Duty Based Ethics fall into three categories:

Principle of Rights

In deciding whether an action is ethical, one should consider what effect her actions would have on the fundamental rights of others.

Foreign Corrupt Practices Act (FCPA)

In response to numerous scandals involving U.S. companies paying bribes to foreign government officials in oder to gain strategic concessions, congress passed ________________ in 1977.

WPH process of ethical decision making.

In the interest of providing future business managers with a practical approach to business ethics that they can use to avoid these costs.

Civil Liability

Initiated by harmed individuals or administrative agencies such as the SEC.

Criminal Culpability

Initiated by law enforcement and/or prosecutors.

Professional Liability

Loss of license to practice in certain professions (i.e. lawyer, accountant, physician, etc.)

Ethics borne of-

Natural Law, Religious principles, Life experiences, cultural and societal expectations, parental and family influences, educational experience.

Creating Ethical Code of Conduct

One of the most effective ways to promote ethical behavior in an organization.

Corporate Citizenship Approach

Organization should promote goals that society considers worthwhile and take positive steps towards solving problems.

Employment Practices of Foreign Suppliers

Organizations monitor these groups.

Prospective Employees

Particularly younger ones, often seek jobs, and are more likely to stay in jobs, that allow them to participate in community improvement and other meaningful social activities.

$2 million in fines for company $100,000 in fines to indviduals Up to 5 years in prison

Penalties for violating the FCPA.

Values

Positive abstractions that capture our sense of what is good and desirable.

Stakeholders of a Corporation

Shareholders/owners Employees Customers Creditors Suppliers The community within which a business operates.

Kantian Ethics

The rightness or wrongness of an action is judged by estimating the consequences that would follow if everyone in a society performed the act under consideration.

Religious Ethics Standard

The rightness or wrongness of an action is usually judged according to its conformity to an absolute rule that commands a particular for of behavior.

Ethics

The study of right and wrong behavior. Knowing whether an action is fair, right or just. The application of moral principles and values to behavior.

Corporate Social Responsibility

The theory that those who manage corporations should be accountable to society for their actions.

Social Responsibility of Business

consists of the expectations that the community imposes on firms doing business inside its borders.

Business Ethics

is the application of moral standards that arise in a business setting (i.e. marketplace and workplace).