Management Chapter 4 Terms

Ethics and Compliance Programs

- designed to support ethical decision making and develop an ethical culture -identifies ethical issues and develops rules that require employees to adhere to mandatory conduct Ex: a company may have a rule that an employee cannot accept a gift or promotional item from a supplier with a value of more than $25

utilitarianism (utilitarian mangers)

-A philosophy where believers seek the greatest satisfaction for the largest number of individuals -believers evaluate the ethics of an action or decision on the basis of its con- sequences for all affected persons -utilitarian managers weigh the costs and benefits of the consequences of all possible alternatives, and then choose the one that benefits the most people

deontology (deontonologists)

-Focuses on human rights and values and on the intentions associated with a particular behavior -Deontologists judge an action by whether it infringes on individual rights or universal principles such as the Golden Rule, equality, or justice

social responsibility vs ethics

-NOT interchangeable -Ethics: relates to an individual's or business's values, principles, and standards and the resulting decisions he or she makes -Social responsibility: a broader concept that concerns the impact of an orga- nization's activities on society

Ethical Issues in Management

-Organizational Relationships (Relationships with subordinates, co-workers, and superiors) - Operations and Communications (destroying records, covering up defects, etc.) Employee Relations (testing procedures, disclosure of personnel records and personality tests represents)

Issue vs Ethical Issue

-The "line" 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

ethics audit

-comprehensive evaluation of a firm's ethics and compliance program and its ethical decisions used to determine whether the program is effective -has your firm met certain ethical standards?)

Opportunity

-conditions that limit unfavorable behavior and/or reward favorable behavior -these conditions can create the opportunity for an employee to act ethically or unethically

CSR (Corporate Social Responsibility )

-deals with economic, legal, ethical, and philanthropic interests of stakeholders

Business ethics

-principles, values, and codes of conduct that define acceptable behavior in business -ethical decisions foster trust among individuals and in business relationships

Ethical issue

-problem, situation, or opportunity that requires a person or organization to choose among several actions that may be ethical or unethical

ethical climate

-set by supervisors and the conduct of coworkers -The greater a person's exposure to unethical behavior, the greater is the likelihood that he or she will act unethically

social audit

-systematic examination of the objectives, strategies, organization, and performance of the social responsibility function -In a social audit, managers evaluate a company's long- and short-term contributions to society and determine whether the firm's social responsibility approach is working

Social Responsibility Requirements

1. Financial Viability 2. Compliance with Legal and Regulatory Requirements 3. Ethics, Principles, and Values 4. Corporate Citizenship

Factors Influencing Ethical Behavior

1. Individual Factors 2. Organizational Factors 3. Opportunity ***All these affect a person to make an Ethical or Unethical Decision***

Sustainability Issues

1. Pollution 2. Response to Environmental Issues ( Companies designate roles to help them achieve their business goals in an environmentally responsible manner)

Seven Steps for Effective Ethics and Compliance Programs

1. Standards and procedures, such as codes of ethics, that are reasonably capable of detecting and preventing misconduct 2.High-level personnel who are responsible for an ethics and compliance program. 3. No substantial discretionary authority given to individuals with a propensity for misconduct 4. Standards and procedures communicated effectively via ethics training programs. 5. Systems to monitor, audit, and report misconduct. 6. Consistent enforcement of standards, codes, and punishment. 7.Continuous improvement of the ethics and compliance program.

codes of ethics

Formalized rules and standards that describe and delineate what the organization expects of its employees

Stakeholder Issues

Relations with owners and investors, employees, consumers

Consumerism

The activities undertaken by independent individuals, groups, and organizations to protect their rights as consumers.

social responsibility

obligation a business assumes to maximize its positive impact and minimize its negative impact on society

Individual values (a.k.a moral philosophies)

sets of principles that describe what a person believes are the right way to behave -interchangeable with moral values

utilitarian managers vs deontonologists

utilitarian managers- more concerned with the end results deontonologists- are concerned with the means to get those results

ethical culture

values, norms, and behaviors that are instilled within the organization

whistle blowing

when employees expose an employer's wrongdoing. This might occur internally or externally.