Fill in the Blank Question- Ethics and Value Based Decision Making

Contractual obligations

**Fiduciary Obligation** To shareholders to make a profit - often conflicts with obligations to society

Ethical Levels (Towle and Hilgret) (Know three)

1. Illegal or Illicit Ethic 2. Legal Ethic - Do whatever is not against the law and utilize every loophole to accomplish your goals. 3. Pecuniary Ethic - the primary goal is achievement and emphasis on outcome. Showing little concern for the rights of others. 4. Power Ethic - Assume an adversarial stance in an effort to dominate the other side regardless of the consequences to the other side. 5. Situational Ethic - Right and wrong is in the eye of the beholder 6. Professional Ethic - Written codes, standards and principles adopted and practiced by individuals, professions and groups. 7. Judaeo-Christian Ethic (Religious) - Recognizing all of the world's great religions have similar moral teachings.

Whistle-Blowing - When is it justifiable? Ralph Nader's guidelines:

1. Is my knowledge of the matter complete and accurate. 2. What are the objectionable practices and what public interests do they harm? 3. How far would I and can I go inside the corporation with my concern or objection 4. Will I be violating any rules by contacting outside parties and, if so, is whistle-blowing nevertheless justified? 5. Will I be violating any laws or ethical duties by not contacting external parties? 6. Once I have decided to act, what is the best way to blow the whistle - anonymously, overtly, by resignation prior to speaking out, or in some other way? 7. What will the likely responses from various sources - inside and outside the organization - to the whistle-blowing action? 8. What is expected to be achieved by whistle-blowing in the particular situation?

Five bases of managerial power (French and Raven)

1. Reward Power - Controlling resources that can reward. 2. Coercive Power - Controlling resources that can punish. 3. Expert Power - Controlling necessary knowledge or information 4. Reference Power - Being personally attractive (charismatic) to other people. 5. Legitimate Power - Authority invested in a position or role.

Success

A Social value. Defined within a particular society, involving comparisons with other as well as "doing well" according to a person's own goals. It summarizes the whole of the good life.

Principles of Rights - or Rights Theory

A key factor in determining whether a business decision is ethical is how that decision affects the rights of others.

Roles

A practice creates roles for its participants. Workers, managers, etc. Defined by the skills, responsibilities, duties and interrelations within the practice. The role usually precedes the person and usually survives the person.

Positive Law

A rule from a superior to an inferior that the inferior habitually obeys, with sanctions imposed if the rule is broken

Impotence

A sense of not being able to do what we want and expect to be able to do. When it exists within a business it leads to resentment which leads to a sense of separation between the individual and the company. Can lead to quietly submissive, superficially satisfied employee who is just putting in time. When people begin to feel their work does not matter much then they just keep up appearances which may lead to further feelings of impotence. The manager's key responsibility is to provide a sense of power, accomplishment, and effectiveness to everyone else so that they remain engaged.

Morality

A specific set of prima facie principles that we all accept without qualification.

Corporate Characters - Michael Maccoby

A. The Craftsman - dedicated to quality, concerned with product and conscientious. B. The Jungle Fighter- views life as a struggle for survival. Sees others as competition or as obstacles to be surmounted. C. The Company person - The "organization" person whose identity is tied up with the company rather than with the particular job he or she does. Concern for well-being of others in the company and for the integrity and reputation of the company. The chief bulwark against ethical straying by a company. D. The Gamesman - interested in challenge. New ideas and strategies are likely to come from this person. Can be excellent team player. As they mature they take on aspects of the Company person. E. The Outlaw - management may tolerate some who flaunt or break rules to shake up the culture.

Test for Ethical Decision Making

A. The legal compliance test - Is what I am about to do in violation of any statutes, laws, or government regulations? B. The public knowledge test - Would I be willing to have this decision exposed to the public or t my significant others? C. The long-term consequences test - How will this decision look at some point in the future? Don't just look at short term benefits. D. The examine your motives test - are your motives purely personal and selfish in nature of are you acting also for the good of others, the organization, or society? E. The inner voice or conscience test - If something inside you says that what you are about to do is wrong then it probably is.

Teleology

Action judged by the likelihood of achieving good and proper results

Deontology

Actions judged by the motives and intentions of the actor

Law of Supply and Demand

Adam Smith's theory which serves as the self-controlling device of society, preventing the greedy from getting too much and the poor from becoming too poor. assures the adequate supply of consumer goods in society as well as an adequate supply of workers to produce them and capital to sponsor them.

Relativism

All actions are judged in relation to time, place and circumstances. There are no objective standards of right and wrong

Social Justice

An ideal of a fair and harmonious society. In an affluent society, everyone has the right to expect a decent life.

Theory Y

Assumes people want to work and want to assume responsibilities.

Theory X

Assumes that people are basically lazy and dislike work, and so must be tempted with rewards and punishments.

Stakeholder responsibility

Defines a company's duties and obligations to various groups by measuring direct and indirect impacts on employees, vendors, the community and the world. Moved away from the traditional view that the sole purpose of a company was to create wealth for the stockholders.

Virtue Ethics

Development of a righteous character is the standard. A virtuous person will act in a morally righteous way

Beneficence

Doing good deeds. It may conflict with utilitariansism

Goal-oriented morality

Emphasis is on how people behave and how it fits into the practices of the community. The utility principle. The greatest good for the greatest number of people and the least pain for as many people as possible.

Puritan Ethic

Emphasizes hard work, abstaining from excessive pleasures and balancing success with humanity. Hard work, wealth, and success are proof of a person's good character.

Jurisprudence

Examines the values or ethics associated with positive law. Ethics are used in developing laws.

Perfectionism

Excess concern for the quality of work done.

Workaholism

Excess concern for the quantity of work done.

(Know Three***) Roles of a manager

Figurehead leader liaison monitor discriminator spokesman entrepreneur disturbance handler resource allocator negotiator

Privacy

Freedom from other people. Every job has its limits-private and personal-beyond which neither employer nor customer can go. Personal life, private habits, or political opinions (unless one uses one's job as a platform for visibility for these opinions) is not relevant to the job. Conduct and behavior on the job is.

Rationality

Getting what we want in the best possible way. Rationality depends upon some agreed upon framework of values concerning acceptable means to and end.

Ethic of Power

Government must be empowered to enforce the laws and bring order.

Ethic of Norms of Conduct

How Most people act. It can be above or below positive law.

Power

Is seen not as superiority over other people but as the ability to get things done, then it is an essential part of freedom. Power is a means to freedom, not and end in itself. Power over people is authoritarianism.

Corporate Codes of Ethics

It is that general sense of values and identity shared by virtually everyone in a corporation. It should be an explicit expression of a set of values that has in fact governed a company and its employees for some time, as opposed to an attempt to persuade or threaten employees into compliance with a set of principles which do not play a significant role in the day to day behavior of its employees. It should not be just a hypocritical attempt at public relations.

Coercision

Lack of choice in undertaking responsibilities or accepting an unfair bargain. Businesses can exploit unskilled or low-level workers or can pressure managers to undertake an unpleasant job or one which is against their principles or they will be fired or demoted. Even a CEO can be forced by a Board to pursue a strategy or policy which he opposes, or lose his job. But do we really have a choice? Is the question really "Do we have an acceptable choice?"

Prima Facie

Latin term for "on first view" or "at first appearance." A priority that is accepted at face value except for cases in which there is an unusually strong counterclaim. i.e. honor your contracts except in case of war.

Hedonism

Life in pursuit of pleasure

Ethic of Custom

Longstanding custom reflects what is known and observed by most people over time

Theory Z

Motivation comes from being part of a group in a supportive institution. A theory of participation

Embeddedness

People become embedded in their jobs and positions and they have trouble seeing beyond the immediate pressures they face. Business ethics calls on us to see beyond our position. In the midst of a company crisis this can be very difficult.

Stealth Marketing

Promoting goods or services without disclosing the relationship between the person doing the promoting and the business offering the goods or services. Ex. (blogging, planting shills in an audience, buzz marketing, celebrity users, etc.)

Ethic of Utility

Promoting the greatest good for the greatest number. "Utilitarianism".

Adam Smith

Published The Wealth of Nations in 1776 said that individuals, left to themselves to pursue their own economic interests will ultimately benefit not only themselves but society as a whole. An "invisible hand" would guide apparently chaotic individualism to collective good. This is the idea of "the market".

Ethical Altruism

Putting the interest of others ahead of your own without regard for any benefit you may receive as a result. Conversely, some would say there is always a pay back, even if it's only feeling virtuous. Bit what about giving your life for another? You won't be around to enjoy the feelings.

Legal Responsibility

Requires a rule or statute that can be broken with a mechanism of the law to enforce or punish. Responsibilities sometimes exist independently of the law.

Negotiation

Separate the people from the problem. Recognize and understand your own position. Recognize and understand the other person's position. Find shared interests.

Moralities of Principles

Simply a set of orders or laws to obey - the Ten Commandments. Immanual Kant's idea of the "categorical imperative" an order or commandment without qualification. The authority may be external - from religion or internal from conscience.

Stockholder Responsibility

Stockholders are responsible for evaluating their investments not only in terms of financial security and expected return but also in terms of the quality of product, how it treats its employees and the surrounding community, and the environment. An ethical and political decision. The stock holder is still ultimately in charge.

Autonomy

The ability to think and act for ourselves rather than simply following orders or rules from others. But this exists within a framework of the job assignment. We have autonomy insofar only as we have something to do and a position of responsibility.

Greenwashing

The act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service. Exaggerating green claims.

Impact social responsibility

The actual causal influence of an industry or a business on its surrounding community, the environment, the political situation or its own consumers. Social responsibility which does not suppose any prior wrong doing on the corporations's part. Responsibilities that every member of society, whether individual or institutional, has equally, by virtue of being a member of society....Contributions. Philanthropy. But companies can go beyond proper bounds and interfere in social concerns under guise of social responsibility. And who decides what is the cause to be supported?

Non Zero Sum Games

The amount to be won or lost is not always fixed and it's not just a matter of beating the opponent. Wealth and markets can be created during the competition rather that existing as a condition of the game.

Ethical Egoism

The argument that, to be a moral person, you should do what's in your best interests. You may weigh considerations of others in your choices as long as the eventual choice serves your self-interest

Cultural Relativism

The belief that there is no single standard of ethical behavior that applies to all people and cultures all of the time. Contracts with ethnocentrism.

Corporate Culture

The conceptual foundation on which a company builds and the self-image from which all else begins. Includes the clientele of the corporation, the kinds of pressures within the organisation, and the openness and mutual concern of both peers and superiors.

Responsibility

The cornerstone of ethics. It is accountability, answerability, sometimes liability but also rewardability. Most of the time responsibility is shared. Those in authority may be even more responsible that those who actually performed the act.

The Silent Stakeholder

The environment. We have responsibilities to future generations as well as to the earth itself.

Triple Bottom Line

The evaluation of a company's social responsibility performance with regard to people, planet, and profit.

Freedom is key to our Free Enterprise System

The idea that the business world should be relatively free from unnecessary government interference, but also our belief that the free market will somehow contribute to freedom in all other aspects of our life. But socialists might define freedom as being free from the threats and insecurities of the free enterprise system.

Ecocentrism

The idea that the environment as a whole has moral standing and we have an obligation to protect the environment even if people neither benefit nor suffer from actions. The environment has inherent worth.

Moral Mazes (Socialist Robert Jackall)

The loss of personal integrity due to the pressures of the organization. Under the wrong kinds of pressures, the wrong kinds of demands for loyalty and unquestioning obedience, our personal virtues and ideals may turn out to be obstacles to success. Personal judgement becomes cloudy and integrity is sacrificed to corporate necessity.

Communitarianism

The need for community values as a multicultural society.

Corporate Responsibility

The people within the corporation have responsibilities. But corporations can be fined or punished. Diffused blame sometimes comes together in the office of the person who is in charge of the corporation. Though he or she may not be aware of the malfeasance yet he or she has regulative responsibility.

Noblesse Oblige

The responsibility of those who have more, to contribute more for the goods of society.

Conflict of interest

The result of difference between and individual's values and those of the company, other people, or society. A. Example-the corporation asks you to carry out an order you consider contrary to what is good and right for society. B. Where conflicts of interest are basically quantitative and measurable on a single scale (i.e.:negotiating for price) they are resolvable through negotiation and compromise. True conflict of interest arises where the variable of emotion or sentiment comes into play (subjective values) for which there is no acceptable measure of price. (i.e. making a profit and increasing pollution). C. We can resolve conflict between different values by establishing priorities: Generally, life and death issues take precedence over financial values. Ethical values take precedence over aesthetic values. Questions of integrity are more important than questions of personal interest. All the extremes of the scale our priorities sometimes go awry.

Game Theory

The theory of policies and planning, and making rational decisions in the face of the uncertainties and risks of the market. Views business firs as activity of individual participants rather than as a system or mechanism. It is an activity performed well or badly in search of certain payoffs and taking certain responsibilities-like a game.

The System Problem or Group Think

The whole becomes much more than the sum of its parts. The problem of accumulated pressure once a decision has been made and all employees have worked diligently toward the goal. The momentum becomes so great that there is little to stop it. Decisions, once implemented, cannot be turned around quickly. Goals, once agreed upon, cannot be immediately forgotten. This is when the basic aim or "business ethics" becomes important

Asceticism

The wholesale rejection of the values of wealth and success. Most powerfully preached by those who have succeeded and renounced the vanity of ambition and success, rather than cynically by those who have failed or chosen not to compete.

Zero Sum games

There must be a clear winner or loser, Someone will take the market or the customer.

Ethics of Justice

There should be rules and equity. Due process

Consumer Responsibility

They vote with their dollars about the products that should be available and the social costs incurred (i.e. "Dolphin-safe tune").

Moral Responsibility

Those duties and obligations that are based on the rules and expectations of morality. They are shared by everyone in society.

Burn out

Total job exhaustion and despair. Largely a matter of wanting or expecting too much of oneself. Since the demands are unattainable, the result is hopelessness. Solution lies in a change of perspective and reevaluation of goals and expectations

Ethic of Civilization

We restrain our base impulses and move to a higher level of civilization

Paternalism

When a business steps in to donate and by encouraging a certain public policy or tastes in the arts of charity thus takes away citizen's won sense of responsibility and autonomy...e.e force employees to support a particular cause.

Cultural Differentiation

When two or more cultures interact and experience conflict because of their differences. A. Differences in language B. Difference in body language C. Differences in urgency and punctuality D. Differences in etiquette E. Ethnocentrism

Corporate Social Responsibility

While it is the responsibility of a corporation to sell decent product at affordable prices it is also the responsibility of the corporation not to destroy the society it serves. i.e. Clean up the mess you make. A corporation's economic responsibility is by no means incompatible with its other corporate responsibilities.

John Calvin (1509-64)

began change in Christian philosophy that secular wealth was not opposed to, but rather a sign of , a person's eventual salvation

Corporation

by its very nature is a liability shield of stockholders, executive and managers. Individuals usually pay by loss of job, demotion, or career derailment.

Business Practices

established systems of behavior within the business world, an industry or a given company

Regulation

exists to protect the market and to guarantee the conditions within which an industry can thrive and survive, and to protect the public good and to provide safeguards for consumers. There must be rules to protect the integrity of the "game".

Freedom of the Market

is not possible unless other freedoms exist - freedom of speech, assembly, association and the freedom to pursue our own material happiness.

Distributive Justice

the fair distribution of the goods of society. Everything that money can buy and some things it can't buy. Includes fair distribution of the hardships and responsibilities of society.