Business Intro: Chapter 2

What is the term given to the groups, individuals and organizations that are directly affected by the practices of an organization?

Organizational stakeholders

What role has e-mail played in business ethics and and company practices?

Personal information and private information. Spying on people. Employees claim it violates them

When a firm increases the price of a good or service because of an increase in demand, what unethical practice are they potentially engaging in?

Price gouging

What is collusion?

Occurs when two or more firms agree to collaborate on such wrongful acts as price fixing

Describe the three-step model for applying ethical judgments.

1) gathering the relevant factual info. 2) determining the most appropriate moral values; and 3) making an ethical judgment based on the rightness or wrongness of the proposed activity or policy

What is likely the single MOST effective step that a company can take to set ethical standards?

Demonstrate support from top management

What do ethical norms that ensure an action is consistent with what's fair entail?

Justice

What term refers to the way in which a business tries to balance its commitments to groups and individuals in its social environment?

Social Responsibility

Some ethical and unethical behaviors fall into gray areas, while others are widely agreed upon

TRUE

When a multinational organization supports its commitment to stakeholders, which stakeholders are they most concerned with?

The stakeholders in every country where business is done

A company that does not act responsibly toward its customers may lose their trust and ultimately their business.

True

An individual's personal code of ethics is shaped by his or her life experiences.

True

In the US, there are increased expectations for a greater social role for business.

True

The Consumer Bill of Rights is backed by numerous federal and state laws

True

When defining its sense of social responsibility a firm typically confronts what areas of concern?

A firm typically confronts and has social responsibility for the following five areas: Customers, employees, investors, suppliers, and local communities

What is the purpose of a written code of ethics?

A written code of ethics formally announces a company's intent to do business in an ethical manner.

What would constitute a conflict of interest in a business setting?

An activity that benefits the individual to the detriment of his or her employer would be considered a conflict of interest

How have companies such as Tyvek, General Motors, and DuPont worked to lessen the impact of waste on the environment?

By achieving zero-landfill status

How do top managers BEST demonstrate a commitment to ethical business practices?

By adopting and enforcing written codes of ethics

What is the main cause of water pollution?

Chemical and waste dumping

Which of the following should be the first step in assessing ethical behavior in a certain situation

Collect facts related to the situation

What is the result of two or more firms collaborating on a wrongful act, such as price fixing?

Collusion

When an activity benefits an individual but not the employer, what ethical dilemma has been created?

Conflict of interest

What must every corporation do in maintaining and reporting its financial status?

Conform to generally accepted accounting principles

Social activism dedicated to protecting the rights of consumers it the result of what?

Consumerism

Define consumerism

Consumerism is social activism dedicated to protecting the rights of consumers in their dealings with businesses

When businesses work to honor warranties, charge fair prices and stand behind the quality of their products, what stakeholder group are they supporting?

Customers

What are individual beliefs about what is right and wrong or good and bad referred to as?

Ethics

What is the difference between ethics and social responsibility?

Ethics are beliefs about what is right and wrong or good and bad. Social responsibility refers to the way in which a business tries to balance its commitments to groups and individuals in its social environment

Business ethics refers to ethical or unethical behaviors by employees in the context of their personal lives

False

Some actions may be illegal, yet considered ethical

False

The ethical norm of utility evaluates whether an acct respects the rights of all parties.

False

The most essential ingredient in encouraging ethical behavior in an organization is letting employees dictate ethical norms

False

The standards of behavior that guide managers in their work are called employee ethics

False

What constitutes ethical behavior is determined entirely by the individual

False

Which government agency regulates advertising and pricing practices to protect consumers?

Federal Trade Commmission

What is the practice of injecting water and chemicals into underground rock in order to break the rock apart called?

Fracking

When a firm modifies a production process to limit the consumption of valuable resources, what business practice are they engaging in?

Green marketing

What does the Sarbanes-Oxley Act of 2002 require that the chief financial officer to do?

Guarantee the accuracy of financial reporting

Which of the following is the BEST description of organizational stakeholders?

Individuals and groups that are directly affected by the practices of a company

Which of the following occurs when someone uses confidential info to gain from the purchase or sale of stocks?

Insider trading

When a stakeholder uses confidential information to fain from the sale or purchase of a stock, what ethical violation are they engaging in?

Insider training

What stakeholder group is being protected when managers follow proper procedures and strive to be accurate and candid in assessing future growth?

Investors

Standards that help to shape behaviors towards employees, the organization, and dother economic agents are

Managerial ethics

If a firm hides responsibility for wrongdoing, what type of stance are they taking toward social responsibility?

Obstrucitonist

Managerial ethics can be classified into three areas; behavior toward employees, behavior toward the organization and behavior toward other economic agents.

True

Though an individual feels that his behavior is ethical, that behavior may still be considered unethical if social norms consider it to be so.

True

What is the term for an employee who discovers an illegal or unethical activity and tries to put an end to it?

Whistle-blower