Principles of Management- Chapter 5

Conventional Level

People learn to conform to the expectations of good behavior as defined by colleagues, family, friends, and society.

Discretionary Responsibility

Purely voluntary and is guided by a company's desire to make social contributions not mandated by economics, law, or ethics.

Procedural Justice

Rules must be administered fairly, clearly stated, and consistently and impartially enforced.

Practical Approach

Sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account.

Ethical Dilemma

Situation in which all alternative choices or behaviors have potentially negative consequences.

Profit-Maximizing View

View that argues that the corporation should be operated on a profit-oriented basis, with its sole mission to increase its profits as long as it stays within the rules of the game.

Individualism Approach

Acts are moral when they promote individual's best long-term interests.

Stakeholder

Any group within or outside the organization that has a stake in the organization's performance.

Ethical Responsibility

Behaviors that are not necessarily codified into law and may not serve the corporation's direct economic interests.

Economic Responsibility

Business institution must produce the goods and services that society wants and to maximize its profits for its owners and shareholders.

Legal Responsibility

Businesses are expected to fulfill their economic goals within the framework of legal requirements imposed by local town councils, state legislators, and federal regulatory agencies.

Ethics

Code of moral principles and values that governs behaviors of a person or group with respect to what is right or wrong.

Chief Ethics Officer

Company executive who oversees all aspects of ethics and legal compliance, including establishing and broadly communicating standards, ethics training, and compliance aspects of decisions.

Principle-Based Statements

Designed to affect corporate culture; they define fundamental values and contain general language about company's responsibilities, quality of products, and treatment of employees.

Distributive Justice

Different treatment of people must not be based on arbitrary characteristics.

Sustainability

Economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well.

Whistle-Blowing

Employee disclosure of illegal, unethical, or illegitimate practices on the employer's part.

Code of Ethics

Formal statement of the company's values concerning ethics and social issues; it communicates to employees what the company stands for.

Policy-Based Statements

Generally outline the procedures to be used in specific ethical situations.

Ethics Committee

Group of executives appointed to oversee company ethics.

Ethics Training

Helps employees deal with ethical questions and translate values stated in a code of ethics into everyday behavior.

Moral-Rights Approach

Human beings have fundamental rights and liberties that cannot be taken away by an individual's decision.

Pre-conventional Level

Individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences.

Principled Level

Individuals are guided by an internal set of values based on universal principles of justice and right and will even disobey rules or laws that violate these principles.

Compensatory Justice

Individuals should be compensated for the cost of their injuries by the party responsible.

Corporate Social Responsibility (CSR)

Management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organization.

Ethical Leadership

Managers are honest and trustworthy, fair in their dealings with employees and customers, and behave ethically in both their personal and professional lives.

Utilitarian Approach

Moral behavior produces the greatest good for the greatest number of people.

Virtue Ethics Approach

Moral behavior stems from personal virtues.

Justice Approach

Moral decisions must be based on standards of equity, fairness, and impartiality.