Business Ethics Final (ch. 5, 7, 8)

Ethics officers

Organizational ethics programs must have oversight by high-ranking persons known to respect legal and ethical standards. Responsible for managing their organizations' ethics and legal compliance programs

Foundations & Principles of Business Ethics

Principles are specific and pervasive boundaries for behavior that should not be violated and often become the base of rules.

Types of leadership power

Reward Coercive Legitimate Expert Referent

Ethics training

Training in Ethics helps the members of an organization judge the moral legitimacy of their decisions, enabling them to apply moral principles and values in business decision-making. At the same time, ethics training fosters the employees' agreement and compliance with the organization's ethical vision representing a mutually-acceptable balance between different stakeholders.

What are some of the values that companies base themselves around?

Trustworthy, respect, responsibility, fairness, caring, citizenship

What are the different organizational structures of an ethics program?

Values orientation compliance orientation

Who gets to decide what is right/wrong in business ethics?

We all get a say

Mission statements

a formal summary of the aims and values of a company, organization, or individual

Reward power

a person's ability to influence the behavior of others by offering them something desirable

Ethical Issue

a problem, situation or opportunity that requires an individual, group or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical

Dodd-Frank Wall street reform and consumer protection act

addressed issues related to financial crisis and recession, most sweeping financial legislation since Sarbanes-Oxley Act, designed to make the financial services industry more ethical and responsible

Affirmative action

an action or policy favoring those who tend to suffer from discrimination, especially in relation to employment or education; positive discrimination.

Corporate Social Responsibility

an organizations obligation to maximize its positive impact of stakeholders and minimize its negative impact

Cultural Relativism

concept that morality cares from one culture to another and that "right" and "wrong" are defined differently

Compliance orientation

creates order by requiring employees to identify with and commit to specific required conduct. It uses legal terms, statutes, and contracts that teach employees the rules and penalties for noncompliance

Sarbanes- Oxley Act

made securities fraud a criminal offense and stiffened penalties for corporate fraud. most reaching change in organizational control and accounting regulations since Securities of Exchange Act of 1934

Referent power

may exist when one person perceives that his or her goals or objectives are similar to another's. The second person may attempt to influence the first to take actions that allows both to achieve their objectives

Deontology

moral philosophies that focus on the rights of individuals and the intentions associated with a particular behavior rather than its consequences Immanuel Kant: premier enlightenment thinker, believes that there is a moral law and its absolute, based on reason, universal and it exists in us because we are endowed with reason (he doesn't like utilitarianism)

Rule deontologist

moral philosophy that evaluates morality on the basis of its conformity to general moral principles based on logic/respect for individual rights

Compliance culture

organized around risk, use a legalistic approach to ethics meaning they use laws and regulatory rules to create codes and requirements

Kohlbergs model of cognitive moral development (CMD)

people make different decisions in similar ethical situations because they are in different moral development stages

Socialism

refers to economic theories advocating the creation of a society when wealth and power are shared and distributed evenly based on the amount of work expended in production Karl Marx: questioned why capitalist got majority of profits, means on production should be shared by society and profits should be shared equally

individualism/collective dimension

refers to how self-oriented members of a culture are in their behavior, place high value on individual achievement and self-interest

Teleogy

refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result such as pleasure, knowledge, career growth, etc.

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

Instrumentalist

reject ideas that 1) ends can be separated from the means that produce them, 2) ends, purposes and outcomes are intrinsically good in and of themselves

Moral intensity

relates to individuals' perceptions of social pressure and the harm they believe their decisions will have on others

Descriptive relativism

relates to observations of other cultures

Immediate job context

relates to opportunity; where an individual works, whom they work with, and the nature of their work

Values-based ethics culture

relies upon an explicit mission statement that defines the core values of the firm and how customers and employees should be treated.

Exacting culture

shows little concern for people but a high concern for performance; it focuses on the interests of the organization

Apathetic culture

shows minimal concern for either people or performance. Individuals focus on their own self-interest.

Legitimate power

stems from the belief that a certain person has the right to exert influence and certain other have an obligation to accept it

Values orientation

strives to develop shared values.The focus is more on abstract core of ideals such as accountability and commitment even though penalties are attached. A positive workplace is created when personal and organizational values are compatible with one another.

Ethical awareness

the ability to perceive whether a situation or decision has an ethical dimensin

Consequentialism

the idea that teleological philosophies assess the moral worth of behavior by looking at its consequences

Code of ethics

the most comprehensive and consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conducts

Ethical issue intensity

the relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization

Corporate culture

the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature

Peter Singer

thinks its morally wrong to blow $ on things we don't need, give away what we don't need, cognitive ability: capacity to feel pain

Significant others

those who have influence in a work group, including peers, managers, coworkers, and subordinates

Milton Friedman

thought market should be self-regulated (believed humans are utilitarian thinkers)

Goodness theory

typically focus on the end result of actions and the goodness or happiness created by them

Categorical Imperative

"act only on that maxim that you could will at the same time, to be a universal law"

Pluralist

"non-hedonists", take the opposite position that no one thing is intrinsically good

What are the steps in the decision-making process?

1. identify dilemma 2. identify alternatives for dealing with issue 3. evaluate alternatives from a moral point of view 4. develop a resolution or argument for why x,y or z is the best option for the situation

Gert Hofstede

1. individualism/collectivism 2. power distance 3. uncertainty avoidance 4. masculinity/feminity 5. long term/short term thinking

Bentham's 7: all about happiness

1. intensity 2. duration 3. certainty/uncertainty 4. propinquity/remoteness 5. fecundity (depth) 6. purity 7. extent

Integrative culture

Combines a high concern for people and performance. An organization becomes integrative when the superiors recognize employees are more than interchangeable parts-employees have an ineffable quality that helps the firm meet its performance criteria.

Business Ethics

Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business

What are the organizational factors that affect ethical awareness, judgment, intent, and behavior?

Corporate culture and obedience to authority

What kind of individual factors affect ethical awareness, judgment, intent, and behavior?

Gender, education, work experience, nationality, age, and locus of control

Federal Sentencing Guidelines for Organizations (FSGO)

approved by Congress in 1991, set the tone for organizational ethical compliance programs in the 1990s, based on the 6 principles of the DII, broke new round by codifying into law incentives to reward organizations for taking action to prevent misconduct, such as developing effective internal legal and ethical compliance programs 1. firm must develop a code of conduct and identify key risk areas 2. must have high-ranking personnel who abide by the law to oversee the ethical program 3. no one who engages in misconduct can hold a leadership position 4. ethical training must be put into place 5. must have a way for employees to report misconduct 6. if misconduct is detected, a firm must take appropriate disciplinary action 7. must take steps to prevent misconduct in the future if it is discovered within the company

John Maynard Keynes

believed that government had role to use power to stimulate portion of the economy

Centralized organization

decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels

Decentralized Organization

decision-making authority is delegated as far down the chain of command as possible. Such organizations have relatively few formal rules, and coordination and control are usually informal and personal. They focus instead on increasing the flow of information

Relativism

definitions of ethical behavior are derived subjectively from the experiences of individuals and groups, use themselves or the people around them as the basis for defining ethical standards Margaret Mead: sharing, exercising social trust in our society, thinks there is no right or wrong and people do things differently from one another

Expert power

derived from a person's knowledge (or a perception that a person possesses knowledge); stems from a superior's credibility with subordinates

Opportunity

describes the conditions in an organization that limit or permit ethical or unethical behavior

Rule utilitarian

determine behavior on the basis of principles or rules designed to promote the greatest utility rather than on individual expectations they encounter

Obligation theory

emphasize the means and motives by which actions are justified and are divided into the categories of teleology and deontology

Occupational Safety and Health Administration (OSHA)

enforces the act and makes regular surprise inspections to ensure businesses maintain safe working environments

Coercive power

essentially the opposite of reward power, instead of rewarding a person for doing something, coercive power penalizes actions or behavior

Act utilitarian

examine specific actions rather than the general rules or governing them to assess whether it produces the greatest utility for the greatest number of people

Caring culture

exhibits high concern for people but minimal concern for performance issues

Justice Theory

fair treatment and due reward in accordance with ethical or legal standards including the disposition to deal with perceived injustices of others John Rawls**

Codes of conduct

formal statements that describe what an organization expects of its employees. May take 1 of the 3 following forms: Code of ethics Code of conduct Statement of Values

Adam Smith

founder of capitalism/free economy, wrote "Wealth of Nations", theory of moral sentiments

Utilitarianism

greatest good for the greatest number of people Jeremy Bentham: believed it was basic human nature to think like a utilitarian, "hedonistic calculus" - J.S. Mill is another utilitarian

Act deontologist

hold that actions are the proper basis to judge morality or ethicalness, requires a person use equity, fairness and impartiality when making and enforcing decisions

What are the 3 universal values?

honesty, fairness and integrity 3 universal values

Normative approaches

how organizational decision makers should approach an issue