UCF MAN 4701 EXAM 1 Study Guide

The Components of Moral Action

1. Moral Sensitivity- Awareness Test 2. Moral Judgement- Deciding right course of action 3. Moral Motivation- Conflicting Values 4. Moral Action- Opposition, Distraction, Fatigue

Why ethical problems occur in business

1. Personal Gain and Self Interest 2. Competitive pressure on profits 3. Conflicts of Interest 4. Cross-Cultural Contradictions

5 Reasons Businesses should be Ethical

1. To meet the demands of the business stakeholders 2. To enhance business performance 3. To comply with legal requirements 4. To prevent or minimize harm 5. To promote personal morality

Ethical Safeguards

1. Top Management Commitment and Involvement 2. Ethics Policies or Codes 3.Ethics and Compliance Officers 4. Ethics Reporting Mechanisms 5. Ethics Training Program 6. Ethics Audits

Four Generally Accepted Ethical Theories

1. Virtue Ethics 2. Rights Ethics 3. Utilitarianism Ethics 4. Justice Ethics

Stakeholders Powers

1. Voting Power- stakeholder has a legitimate right to cast a vote (Stockholder) 2. Economic Power- Suppliers, Customers, Retailers, Employees 3. Political Power- legislation, regulation, lawsuits (Governments, Activists) 4. Legal Power- when they bring a suit against a company for damages. (Customers)

Stewardess Principle

Business leaders that believe that they have an obligation to see that everyone particularity those in need or at risk benefit from the firms actions

Step Seven of the Seven Step Model

Can you explain and justify your decision to others?

Hardship

Challenges develop leaders Business Mistakes and Failures Career setbacks Personal Trauma Problem Employees Downsizing

Two (CSR) Principles

Charity Principle Stewardess Principle

Legal Action vs Moral Action

Legal but unethical actions Laws can't a;ways define the proper action

Managers and Influencing Ethical Decision Making

Managers are key to whether or not a company and it's employees will act ethically or unethically They serve as role models

Examples of Secondary Stakeholders

Media, General Public, Communities, Governments, Non Governmental Organizations

(OECD) Organization for Economic Cooperation and Development

Member countries to deter, prevent, and combat the bribery of public officials in foreign countries

Ethics Training Program

Most expensive and time consuming safe guard, typically offered to managers

Ethical Principles

guides to moral behavior

Stakeholder

refers to persons or groups affected by an organizations decesions, policies and operations

Key to business survival

the ability to adapt effectively to changing conditions

Corporate Power

the capability of corporations to influence government, the economy, and society based on their organizational resources.

Charity Principle

the idea that the wealthiest members of society should be chariatble to the less fortunate

Market Stakeholders

those that engage in economic transactions with the company, also called primary stakeholders, "two-way" exchange

Role Model

"Character is more caught than taught" Observation and Imitation

Top Management Comittment and involvement

The example set by top executives is critical to fostering ethical behavior

Moral Development Level Two

"Conventional Level" Focus on Others Stage 4: Law and Order Mentality Stage 5: Good boy/ Nice girl

Moral Development Level One

"Pre-Conventional Level" Self Focused Stage 1: Reaction to Punishment Stage 2: Seeking of Rewards

Moral Development Level Three

"Principled Level" Focus on Humankind Stage 5:Moral beliefs over social customs human rights etc. Stage 6: Universal Ethical Principle Orientation

Arguments for Social Responsibility

1. Balances corporate power with responsibility 2. Discourages Government Regulation 3. Promotes Long-Term profit for businesses 4. Improves business value and Reputation 5. Corrects Social Problems caused by Business

Moral Imagination Requirements

1. Disengagement from role, situation, or context 2. Awareness of scheme using or being used 3. Creative vision or new possibilities 4. Evaluation of old context

The distinct ethical criteria

1. Egoism (self-centered) Self Interest Focus 2. Benevolence (Concern for others) 3. Principle (Integrity Approach)

Forces that Shape Society and Business Relationship

1. Evolving government regulation in business 2. Globalization 3. Explosion of new technology 4. Dynamic Natural Environment 5. Changing societal expectations 6. Growing emphasis on ethical values

Arguments Against CSR

1. Lowers economic Efficiency and Profits 2. Imposes unequal costs among competitors 3. Imposes hidden costs passed on to stakeholders 4. Requires skills businesses may lack 5. Place responsibility on businesses rather than individuals

(CSR) Corporate Social Responsibility

A Corporations should act in a way that enhances society and should be held accountable for any of its actions that affects people, their communities, or their environments

Ethics

A conception of right and wrong conduct

Fiduciary

A person who exercises power on behalf of another In U.S. law managers

Bribery

A questionable or unjust payment to a government official to ensure or facilitate a business transaction, found in almost every sector of the global marketplace

Ethical Challenges in Multiple Functions of Business

Accounting Ethics, Marketing Ethics, Financial Ethics, Information Technology Ethics, purchasing department, Worker Safety

General System Theory

All organisms are open to and interact with their external environments

Rights Ethics

An action is ethical when basic human rights are respected Based on respecting entitlements: Life, Safety, Free Speech, Freedom

Justice Ethics

An action is ethical when benefits and costs are fairly distributed Based on distributing fair share

Virtue Ethics

An action is ethical when it aligns with good character Based on Values and personal character

Utilitarian Ethics

An action is ethical when net benefits exceed net cost Based upon comparing benefits and costs

Business

Any organization that is engaged in making a product or providing a service for a profit

Why do good people engage in un-ethical acts?

Consensus/ peer pressure Obedience to authority Self Serving Bias Lack of Courage Confusion and Error Selectivity

Stakeholder examples

Customers, Employees, stockholders, the media, governments

Boundary Spanning Departments

Departments or offices that reach across the dividing line to help its customers (Public Relations Department, Government Affairs, Corporate Relations)

Three core arguments of Stakeholder theory

Descriptive - simply a more realistic description of how companies really work Instrumental Argument- says that stakeholder management is more effective as a coorperate strategy Normative Argument- says that stakeholder management is simply the right thing to do

Ways to trigger Moral Imagination

Develop another perspective using a fresh point of view Ask the right questions Appeal to shared moral rules and moral standards

Non Market Stakeholders

Do not engage in direct economic exchange directly, secondary stakeholders

Interactive Social System

Each needs the other and each influences the other, they are entwined so completely that any action taken by one will surely affect the other, they are both separate and connected.

A business multiple responsibilities

Economic, Legal, Social

Examples of Primary Stakeholders

Employees, Stockholders, Creditors, Suppliers, Customers.

(FCPA) Foreign Corrupt Practices Act

Executives representing U.S. based companies are prohibited from paying bribes to foreign government officials, political parties, or political canidates

Stakeholder Analysis

Four Key questions Who are the relevant stakeholders? What are the interest of each stakeholder? What is the power of each stakeholder? How are coalitions likely to form?

Most common global ethical control

Government intervention and regulation

White Collar Crime

Illegal acts committed by employees or business professionals such as fraud, insider trading, embezzlement, or computer crime

Iron Law of Responsibility

In the long run, those who do not use power in ways that society considers responsible will; tend to loose it

Stakeholder Map

Helps managers see how stakeholder coalitions are likely to form and what outcomes are likely

Ethics and Compliance Officers

People who monitor the development and implementation of ethics in a business

Stakeholder Coalition

Temporary alliances for stakeholders to reach a common goal

Biggest social influence

The employees

Stages of Moral Development and Ethical Reasoning

Six Different Stage Three Different Levels

Social Responsibility Balance

Social responsibility requires companies to balance the benefits to be gained against the costs of achieving those benefits

Laws

Society's attempt to formalize, to reduce to written rules, the general public's ideas about what constitutes right and wrong conduct in various spheres of life

Start of (CSR)

Start of the 20th century

Ownership Theory of a firm

The purpose of the firm is to maximize the long-term market value

Society

The segments of mankind such as members of a particular community, nation, or interest group

Ethical Climate

The unspoken understanding among employees of what is and is not acceptable behavior

Stakeholder Theory of a firm

To create value for society

Ethical Policies or Codes

To provide guidance to managers and employees when they encounter the ethical dilemma

Business Managers who are trying to improve ethical performance need to do more than just obey the law True or False

True

Laws and Ethics are not the same

True

Ethical Dilemma Types of Conflict

Truth vs. Loyalty Short Term vs. Long Term Justice vs. Mercy Individual vs. Community

Ethics Reporting Mechanisms

Very Common Approach Seeks to : provide interpretations of proper ethical behavior involving conflicts of interest and the appropriateness of gift giving, to create an avenue to report unethical conduct, and to give employees and stakeholders a way to discover general information about a wide range of work related topics.

Collective Stories

Virtues Imported from stories Understanding of Limits and possibilities Living up to roles in the stories=character growth

Step One of Seven Step Model

What are the facts?

Step Two of the Seven Step Model

What can you guess about the facts you dont know

Step Three of the Seven Step Model

What do the facts mean? (What is the ethical dilemma)

Step Six of the Seven Step Model

What do your feelings tell you?

Step Four of the Seven Step Model

What does the problem look like from the eyes of the people involved?

Ethical Concepts

are more complex than the written rule of law

Step Five of the Seven Step Model

What will happen if you choose one thing over another?

Ethics Audits

When an auditor, either hired outside consultant or an internal employee is required to not any deviations from the company's ethical standards and bring them to the attention of the audit supervisor.

Stakeholder Salience

When stakeholders stand out to companies due to power, legitimacy, and urgency Can be used to develop a stakeholder map

Cooperate Culture

a blend of ideas, customs, traditional practices, company values, and shared meanings that help define normal behavior for everyone who work in a company

Business Ethics

application of general ethical ideas to business behavior