MNT Vocab Chapter 4

Rules for Ethical Decision Making

Utilitarian, Justice, Moral Rights, and Practical

There are no___________ or ____________ rules or principles that can be developed to decide if an action is ethical or unethical

absolute; indisputable

practical rule

an ethical decision should be one that a manager has no hesitation about communicating to people outside the company because the typical person in a society would think the decision is acceptable

justice rule

an ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner

moral rights rule

an ethical decision should maintain and protect the fundamental rights and privileges of people

Utilitarian Rule

an ethical decision should produce the greatest good for the greatest number of people

proactive approach

companies actively embrace socially responsible behavior, going out of their way to learn about the needs of different stakeholder groups and utilizing organizational resources to promote the interests of all stakeholders

defensive approach

companies and managers stay within the law and abide strictly with legal requirements but make no attempt to exercise social responsibility

accommodative approach

companies behave legally and ethically and try to balance the interests of different stakeholders against one another so that the claims of stockholders are seen in relation to the claims of other stakeholders

obstructionist approach

companies choose not to behave in a social responsible way and behave unethically and illegality

reputation

esteem or high repute that individuals or organizations gain when they behave ethically

role of organizational culture

ethical values and norms help organizational members resist self-interested action, and realize they are part of something bigger than themselves

Suppliers

expect to be paid fairly and promptly for their inputs

distributors

expect to receive quality products at agreed-upon prices

employees

expect to receive rewards consistent with their performance; companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions

Neither laws nor ethnics are _________________. Managers must confront the need to decide what is appropriate and inappropriate as they use a company's resources to produce goods and services

fixed principles

Approaches to Social Responsbility

four different approaches: obstructionist, defensive, accommodative, and proactive

Source of Ethics

four main determinants of difference in ethics between people, employees, companies, & countries; includes societal, individual, organizational, and occupational ethics

organizational ethics

guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders; top managers play a crucial role in determining a company's ethics

ethics

inner-guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave; indicates what is inappropriate behavior and how a person should behave to avoid harm

corrupt manages

managers that focus not on building a company's capital and stockholder's wealth but on maximizing their own personal capital and wealth; causes major problems in companies

Customers

most critical stakeholder; company must work to increase efficiency and effectiveness in order to create loyal members of this group, and attract new one

individual ethics

personal standards and values that determine how people view their responsibilities to other people an groups; how they should act in situations when their own self-interests are at stake

community

physical locations like towns or cities in which companies are located; provides a company with physical and social infrastructure that allows it to operate; a company contributes to the economy of the town or region through salaries, wages, and taxes; when plants shut down, these are affected because there are no jobs left

ethical dilemmma

quandary people find themselves in when they have to decide if they should act in a way that might help another person even thought doing so might go against their own self-interest

ethics ombudsman

responsible for communicating ethical standards to all employees; designs systems to monitor employees conformity to those standards; teaches managers and employees at all levels of the organization how to appropriately respond to ethical dilemmas

managers

responsible for using a company's financial capital and human resources to increase its performance; have the right to expect a good return or reward by investing their human capital to improve a company's performance; frequently juggle multiple interests

occupational ethics

standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities

societal ethics

standards that govern how members of society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual; people behave ethically because they have internalized certain values, beliefs and norms

stakeholders

the people and groups that supply a company with its productive resources; as a result they have a claim on and stake in the company; includes stockholders, managers, customers, community/society/nation-state, suppliers and distributors, and employees

social responsibility

the way a company's managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole

stockholders

want to ensure that managers are behaving ethically and not risking investors' capital by engaging in actions that could hurt the company's reputation; want to maximize their return on investment

collective disaster

when one or more people start to profit from being unethical which encourages other people/employees to act in the same way

trust

willingness of one person or group to have faith or confidence in the goodwill of another person