Business Ethics Exam 3
Laws that Encourage EthicalConduct
(1) 1991 Federal Sentencing Guidelines for Organizations (2) 2002 Sarbanes-Oxley Act 3) Dodd Frank Wall street act
Mandated Requirements for Legal Compliance 1-5
(1) Regulation of competition, (2) protection of consumers, (3) promotion of equity and safety, (4) protection of the natural environment, and (5) incentives to encourage organizational compliance programs to deter misconduct
6 spheres of influence
1. workplace 2. family 3. religion 4. legal system 5. community 6. profession
Trademark Revision Act
Amends the Lanham act to allow brands not yet introduced to be protected through patent and trademark registration
Mandated Requirements for Legal Compliance
Any practice that does not reduce competition or harm consumers or society is permitted
Nationality in ethical decision making
Because of cultural differences, it is impossible to state that ethical decision making in an organizational context will differ significantly among individuals of different nationalities.
Cause related marketing can affect consumer _____, if consumers are sympathetic to the cause and the brand and cause are seen as a good fit.
Buying Patterns
High levels of _____ create a higher probability that firms cut corners because margins are usually low.
Competition
Dodd-Frank Act Provisions
Created new financial agencies Office of Financial Research Financial Stability Oversight Council (FSOC) Consumer Financial Protection Bureau (CFPB) Instituted a whistle-blower bounty program
Federal Trade Commission Act (1914)
Created the FTC to help enforce anti trust laws
Fair Debt Collection Practices Act
Defines permissible debt collection practices
Civil Law
Defines the rights and duties of individuals and organizations
Coercive leader
Demands instant obedience and focuses on achievement, initiative, and self-control
Occupational Safety and Health Act
Designed to ensure healthful and safe working conditions for all employees
Equality Principle
Each person has basic rights that are compatible to the basic liberties of others
internal locus of control
Employees who believe they control the events in their lives by their own effort and skill have a(n)
Laws Promoting Equity and Safety
Equal pay act of 1963 title VII of the civil rights act age discrimination in employment act occupational safety and health act american's with disabilities act
Companies that _____ will most likely be found in violation of procompetitive legislation.
Establish Monopolies
The ethical decision making process includes
Ethical issue intensity Individual factors Organizational factors
Jumpstart Our Business Startups (JOBS) Act
Exempts emerging growth companies from observing the auditor attestation requirements from Sarbanes-Oxley 404(b)
A study has found that those with an external locus of control were positively correlated with ethical decision making, whereas those with an internal locus of control were negatively correlated.
False
Which of the following provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance?
Federal Sentencing Guidelines for Organizations, Sarbanes-Oxley Act, and Dodd-Frank Act
Anticompetitive strategies that focus on weakening or destroying a competitor have spurred antitrust legislation and include all of the following except
Free Samples
education and ethical decisions
Generally, the more education or work experience people have they are better at making ethical decisions. The type of education someone receives has little or no affect on ethics.
FTC Improvement Act
Gives the FTC more power to prohibit unfair industry practices
Toy Safety Act
Gives the government the power to recall dangerous toys quickly
external locus of control
Go with the flow, because that's all they can do
What is the first step that an unethical decision has been made?
Guilt or uneasiness
Credit Card Accountability, Responsibility, and Disclosure Act
Implemented strict rules on credit card companies regarding topics such as issuing credit to youth, terms of disclosure, interest rates, and fees
Voluntary Responsibilities benefits
Improves quality of life in communities Reduces government involvement Develops employee leadership skills Helps create an ethical culture
Voluntary Practices
Include beliefs, values, and voluntary contractual obligations of a business All businesses have some voluntary commitments Philanthropy: Giving back to communities and causes
Leadership styles influence organizational behavior
Including employee's acceptance of/adherence to organizational norms and values A challenge for leaders is gaining trust and commitment
The Importance of Institutionalization in Business Ethics
Involves embedding values, norms, and artifacts in organizations, industries, and society
who believed justice principles were beliefs that everyone could accept?
John rawls
Laws Regulating Competition definition
Laws passed to prevent the establishment of monopolies, inequitable pricing, and other practices that reduce or restrict competition among businesses
Externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements are known as
Mandated Boundaries
Public Company Accounting Oversight Board
Monitors accounting firms that audit public corporations
Guarantees whistle-blower protection SOX act
Motivates employees to disclose information in a judicial proceeding against the private employer
Institutional Theory
Organizations operate according to taken for granted institutional norms and rules
Dodd-Frank Wall Street Reform and Consumer Protection Act
Overhaul of the US financial regulatory system
Gatekeeper
Overseers of business actions Accountants, regulators, lawyers, financial rating firms, auditors Are critical in providing accurate information to stakeholders
Federal Sentencing Guidelines for Organizations
Passed in 1991 to create an incentive for organizations to develop and implement programs designed to foster ethical and legal compliance.
Equal Pay Act
Prohibits different pay for males and females for the same work (1963).
Title VII of the Civil Rights Act of 1964
Prohibits discrimination in employment decisions on the basis of race, religion, sex, color, or national origin
Age discrimination act
Prohibits discrimination on the basis of age in federally assisted programs
Criminal Law
Prohibits specific actions and imposes fines or imprisonment as punishment for breaking the law
Clayton Act of 1914
Prohibits specific practices such as price discrimination, exclusive-dealer arrangements to restrict competition
Lanaham Act
Protects and regulates brand names, brand marks, trade names and trademarks
Laws protecting consumers
Pure food and drug act truth in lending act fait debt collection practices act toy safety act children's online privacy protection act credit card accountability responsibility and disclosure act
Categories of laws impacting companies
Regulating competition Protecting consumers Protecting equity and safety Incentives to encourage organizational compliance programs
locus of control
Relates to individual differences in relation to a general belief about how one is affected by internal versus external events or reinforcements
Democratic leader
Relies on participation and teamwork to reach collaborative decisions
Truth in Lending Act
Requires full disclosure of credit terms to purchasers
Children's Online Privacy Protection Act
Requires the FTC to formulate rules for collecting online information from children under 13
Laws Regulating Competition
Sherman Anti trust act FTC Lanham Act FCT Improvement act FCPA Trademark law revision act digital millennium act
The _____ regulates tobacco, dietary supplements, vaccines, veterinary drugs, medical devices, cosmetics, products that give off radiation, and biological products.
The Food and Drug Administration
Leadership
The ability or authority to guide and direct others toward achievement of a goal. Leaders provide a blueprint for an organization's corporate culture and ethics.
Pure Food and Drug Act of 1906
The first consumer protection law was passed in 1906 in response to poor working conditions in factories
Which of the following groups is not a group that receives special legal protections?
The highly educated
strategic philanthropy
The synergistic and mutually beneficial use of a company's core competencies and resources to deal with social issues
For people who begin the value shift that leads to unethical decisions, which of the following is not a usual justification to reduce and eliminate guilt?
This is in keeping with my personal morals and the code of conduct, so it is okay.
________ is the glue that holds businesses together
Trust
there is a
Unclear relationship between locus of control and ethical decision making
Examined how individuals would formulate principles if they were uncertain about their future position in society
Veil of ignorance by rawls
_____ responsibilities relate to a business's contributions to stakeholders.
Voluntary
Core Practice
a highly appropriate and common practice that helps ensure compliance with legal requirements, industry self-regulation, and societal expectations
Voluntary boundary
a management-initiated boundary of conduct (beliefs, values, voluntary policies, and voluntary contractual obligations)
Sarbanes-Oxley Act of 2002
a system of federal oversight of corporate accounting practices. Strengthened penalties for corporate fraud, requires corporations to establish codes of ethics for financial reporting.
Divine Command Theory
a theory asserting that the morally right action is the one that God commands
Natural Law Theory
a theory asserting that the morally right action is the one that follows the dictates of nature
Internal Control
believe they can control events; are masters of their destinies and trust in their capacity to influence their environment
Coaching leader
builds a positive climate by developing skills to foster long-term success, delegating responsibility, and skillfully issuing challenging assignments
What is the 2nd step that an unethical decision has been made?
changing the behavior to reduce such feelings
Pacesetting leader
create a negative climate because of the high standards that he or she sets
Difference Principle
economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society
An organizational ethical culture is shaped by
effective leadership
A major purpose of the Federal Sentencing Guidelines for Organizations, the Sarbanes-Oxley Act, and the Dodd-Frank Act is to
encourage employees to report misconduct.
social entrepreneurship
entrepreneur founds an organization with the purpose of creating social value.
obedience to authority
explains why many employees resolve business ethics issues by simply following the directives of a superior
People who believe in _____ go with the flow because they feel the events in their lives are uncontrollable.
external locus of control
Mandated Boundary
externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements
instrumental concern
focuses on positive outcomes, including firm profitability and benefits to society.
compliance costs
have reduced over the years
normative approach
how organizational decision makers should approach an issue
Institutionalization helps
implant values, norms, and artifacts in organizations, industries, and society
moral intensity
individuals' perceptions of social pressure and the harm they believe their decisions will have on others
Authoritative leader
inspires employees to follow a vision, facilitates change, and creates a strongly positive performance climate
Studies have found that more than a third of the unethical situations that lower and middle-level managers face come from _____.
internal pressures and ambiguity surrounding internal organizational rules.
Better Business Bureau (BBB)
is a core practice, a leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases
Research concerning nationality and the ability to make ethical decisions
is hard to interpret in a business context because of cultural differences.
Foreign Corrupt Practices Act
makes it illegal to pay foreign government officials to facilitate business or to use third parties such as agents and consultants to provide bribes to such officals
Following the ethical directives of a superior relates to
obedience to authority
According to the ethical decision-making framework, the absence of punishment provides a(n) _____ for unethical behavior.
opportunity
Multiple elements work on individuals to affect their behavior. While an individual may intend to do the right thing, _____ can alter this intent.
organizational or social forces
Americans with Disabilities Act
prohibits discrimination against the disabled
Title VII of the Civil Rights Act of 1964
prohibits discrimination on the basis of race, color, sex, religion, or national origin.
Sherman Antitrust Act
prohibits monopolies
Laws Promoting Equity and Safety definition
protect the rights of minorities, women, older persons, and disabled persons
Digital Millennium Copyright Act
refines copyright laws to protect digital versions of copyrighted materials, including music and movies.
ethical culture
reflects the integrity of decisions made and is a function of many factors, including corporate policies, top management's leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior
Laws protecting consumers definition
require businesses to provide accurate information about products and services and to follow safety standards
Auditor and analyst independence
section 201 prohibits registered public accounting firms from providing both non-audit and audit services to a public company
Age in Ethical Decision making
several decades ago, it used to be, the older you were, the more ethical you were.
An ethical corporate culture needs
shared values and proper oversight
ethical awareness
the ability to perceive whether a situation or decision has an ethical dimension
Hermeneutics
the branch of knowledge that deals with interpretation, especially of the Bible or literary texts.
opportunity
the conditions in an organization that limit or permit ethical or unethical behavior
Ethical Intensity
the relevance or importance of an event or decision in the eyes of the individual, work group, or organization.
corporate culture
the set of values, ideas, and attitudes that is learned and shared among the members of an organization
Gender and Ethical Decisions
there are no differences between men and women. however when differences are found, women are generally more ethical than men.
significant others
those who have influence in a work group, including peers, managers, coworkers, and subordinates. They help workers on a daily basis with unfamiliar tasks and provide advice and information in both formal and informal ways.
cause-related marketing
ties an organization's products directly to a social concern through a marketing program
Affiliative leader
values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking
Immediate job context
where they work, whom they work with, and the nature of the work