Understanding Business: Chapter 4

Corporate Responsibility

The dimension of social responsibility that includes everything from hiring minority workers to making safe products

Corporate policy

The dimension of social responsibility that refers to the position a firm takes on social and political issues

Corporate social responsibility

The term that describes a businesses concern for the welfare of society that is based on a commitment to integrity, fairness, and respect. Includes corporate responsibility, social initiatives, corporate policy, and corporate philanthropy.

Social Audit

A systematic evaluation of an organizations progress toward implementing socially responsible and responsive programs

Insider Trading

An unethical activity in which insiders use private company information to further their own fortunes or those of their families and friends.

Difference between ethics and legality

Define: Ethics goes beyond obeying laws to include abiding by the moral standards accepted by society. Legality is more limiting; it refers only to laws written to protect people from fraud, theft, and violence.

Corporate social initiatives

Enhanced forms of corporate philanthropy directly related to the companies competencies

integrity-based ethics codes

Ethical standards that define the organizations guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees

Compliance-based ethics codes

Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrong doers

Is it legal, balanced, and how will it make me feel?

How can we tell if our business decisions are ethical?

Whistleblowers

Insiders who report illegal or unethical behavior

Socially conscious investors

Investors who insist that a company extend its own high standards to its suppliers

Ethics

Standards of moral behavior, that is, behavior accepted by society as right versus wrong

Corporate philanthropy

The dimension of social responsibility that includes charitable donations (to non profits)

5 Ethical "watchdogs"

What are (in business ethics), socially conscious investors, social conscious research organizations, environmentalists, union officials, and customers?

Social conscious research organizations

Who analyzes and reports on corporate social responsibility efforts?

Environmentalists

Who applies pressure by naming companies that don't abide by environmentalists standards?

Union officials

Who hunts down violations and forces companies to comply to avoid negative publicity?