MANGT 596 FINAL

Title VII of the Civil Rights Act of 1964 - What did it say?

- Prohibits discrimination in all aspects of employment (hiring, firing, and promotion) on the basis of race, color, religion, sex, and national origin (but NOT age) - Allows use of BFOQs

Gilligan's Ethics of Care Theory - What does it say?

An alternative to Kohlberg's Theory called Ethics of Care •Focuses on gender differences in moral reason -Men tend to deal with moral issues in a way that are impersonal, impartial, and abstract -Women tend to focus more on relationship maintenance and hurt avoidance

Golden Rule

"Do unto others as you would have them do unto you." Actions are ethical to the extent that they follow this "rule" Advantages: -Rooted in history and religious tradition -Universal Four reasons why it should be adopted: 1. Accepted by most people 2. Easy to understand 3. Win-win philosophy 4. Acts as a compass when you need direction

Principle of Justice -Distributive vs. Procedural vs. Compensatory (be able to identify decisions made using each) -What do they focus on?

"Fairness principle" Focuses on fair treatment of persons Deontological theory- Focus on the duties of the decision maker that determine what needs to be considered for the decision to be ethical Behavior is ethical to the extent that it is just and treats those involved fairly -Distributive justice- distribution of benefits and burdens -Procedural justice (ethical due process)- fair decision-making procedures -Compensatory justice-compensating someone for a past injustice

Golden Rule of Politics

"He who has the gold, [makes the] rules."

Affirmative Action Postures - difference between them

- Passive Nondiscrimination - treat all employees equally • Fails to recognize that past discrimination leaves many prospective employees unaware of or unprepared for present opportunities - Pure Affirmative Action - make concerted effort to enlarge applicant pool • At the point of decision to hire or promote, the company selects the most qualified applicant without regard to sex or race - Affirmative Action with Preferential Hiring - favor minorities who are qualified • "Soft" quota system - Hard Quotas - set target ratios for the hiring of under- represented minorities

Dimensions of product quality

- Performance - primary operating characteristics - Features - "bells and whistles" that supplement basic functioning - Reliability - probability of product malfunctioning of failing - Conformance - extent product meets established standards - Durability - measure of product life - Serviceability - speed, courtesy, competency of repair - Aesthetics - subjective factor to product look, feel, taste, etc - Perceived Quality - subjective inference on tangible and intangible product characteristics

Legality of monitoring employees? What is allowed and what isn't?

CAN: • Employee location • Employee internet history • Employee email CANNOT:

American with Disabilities Act of 1990 - What did it say?

- Prohibits discrimination in all aspects of employment against qualified individuals with disabilities - Includes physical and mental disabilities - Establishes concept of reasonable accommodation • If a person's disability makes it difficult for him or her to function, firms are expected to make reasonable accommodations if the person does not represent an undue hardship for the firm

Age Discrimination in Employment Act of 1967 - What did it say?

- Prohibits discrimination in all aspects of employment for those 40 years of age and older

Equal Pay Act of 1963 - What did it say?

- Prohibits discrimination in pay between men and women on the basis of sex for individuals who do substantially equal work under similar working conditions for the same employer

Tragedy of the commons

- Relationship to Carrying Capacity - NIMBY Problem • Not In MY Back Yard!

Absolute liability vs. strict liability

- Strict Liability - concept arises from social costs theory; the basic idea is that anyone involved in the value chain is responsible for any harm done - Absolute Liability - extension of strict liability to include the idea that firms are liable for damages even if it was scientifically unknowable at the time of manufacture and sale that the product would cause harm

Rawl's "Veil of Ignorance" concept

-Assumption that decision-maker is unaware of whether they, personally, were rich or poor, talented or incompetent -Agree to maximize the well-being of the worst-off person

Keys to Crisis Communication

-Be First -Be Right -Be Credible

Harvard Business Review Study - Factors Affecting the Organization's Moral Climate

-Behavior of superiors/supervisors -Behavior of one's organizational peers -Ethical practices of one's industry or profession -Society's moral climate -Formal organizational policy (or lack thereof) -Personal financial need

Carroll's Four-part definition of CSR (pyramid) -Be able to name them -Match them with examples

-ECONOMIC - Required by society, be profitable. -LEGAL - Required by society, Obey all laws. -ETHICAL - Expected by society, avoid questionable practices. -PHILANTHROPIC - Desired/Expected by society, be a good corporate citizen.

Ralph Nader, what is he known for? What was his book titled? What industry/company did the book target?

-He ran for President of the United States on several occasions as an independent and third party candidate -A consumer advocate -"Unsafe at Any Speed" -He targeted the automobile industry-its prioritization of style and design over consumer safety. (GM)

Relationship between CSP and CFP

-Perspective 1: higher CSP leads to increased CFP. (studies are inconclusive) -Perspective 2: increased CFP leads to higher CSP. ("fairweather" concept, when the money is available) -Perspective 3: reciprocal and interactive relationships among CSP and CFP

Positive Rights vs. Negative Rights (understand and correctly identify examples)

-Positive rights: the right to something (food, healthcare, clean air, certain standard of living, education) -Negative rights: right to be left alone. The right to think and act free from the coercion of others. (i.e. freedom from false imprisonment, freedom from illegal search and seizure, and freedom of speech)

Bhopal Tragedy - background, details

-Union Carbide India Limited plant in Bhopal, India -Leak of toxic gas kills more than 2,000 people -December 2-3, 1984 -Pressure in MIC tank rocketed to 55lbs per sq in -Water leaked into tank containing MIC increasing temp into tank into over 200 deg Celsius 3 safety systems failed 1. Vent gas scrubber 2. Flare Tower 3. Spare Tank -Attempted to spray with water which reached 100ft, the gas leak was at 120 ft -The public siren started at 2:30am -People felt suffocation, cough, burning eyes and vomiting -About 3,000 died immediately, 8,000 died in the next week, 15,000-20,000 died over time, half a million people were directly or indirectly impacted

Three models of Management Ethics -Immoral management -Moral management -Amoral management

1. Immoral Management - approach that is devoid of ethical principles, implies a positive and active opposition to what is ethical. 2. Moral Management - highest standards of ethical behavior. 3. Amoral Management - Doesn't always act either moral or immoral. Business is free to be business

Key features of SOX

1. Auditor independence 2. Increased financial disclosure required 3. Increased whistleblower protections 4. CEO's and CFO's held accountable for financial representations of the company.

Rarity vs non-substitutability vs inimitability

1. Be rare 2. Add value 3. Be inimitable-Difficult for another company to copy or duplicate 4. Be non-substitutable

Three main reasons/justification for regulation?

1. Controlling natural monopolies(These occur because the economies of scale of the largest firm enable it to have a monopoly. Think of the telephone business) 2. Controlling negative externalities(Negative externalities are effects that result from a manufacturer producing a product that has unintended consequences on a third party, like consumers. Also called social costs because they are absorbed by society) 3. Achieving social goals(Social goals also align with negative externalities by seeking the best for the public interest. Examples include banning certain harmful product, mistreatment of minorities)

Types of Stakes (Interest/right/ownership)

1. Interest- When a person or group will be affected by a decision, it has an interest in that decision. (community, PETA) 2. Rights- When a person or group has legal claim to be treated in a certain way or to have a particular right protected. (employee, customers, owner) 3. Ownership- When a person or group has a legal title to an asset or a property. (Literally own)

Triple Bottom Line -Name them!

1. economic - profits. 2. social - people. 3. environmental - planet.

History of ratio of CEO pay

1980: 42-to-1 1990: 85-to-1 2000: 531-to-1 2010: 343-to-1

Ethical tests o Big Four o Common Sense Test o Disclosure Test o Gag Test o One's Best Self

A bunch of hypothetical tests that tell you if you should do something. I,e: 1. test of common sense(Does the action I am getting ready to take really make sense?) 2. test of one's best self(Is this action or decision I am getting ready to take compatible with my concept of myself at my best?) 3. Test of making something public(How would I feel if others knew I was doing this? How would I feel if others knew that my decisions or actions were going to be featured in the national evening news tonight for all the world to see?) 4. Test of ventilation(Expose your proposed action to others and get their thoughts on it, works best if you ask people who do not normally see things your way) 5. Test of the purified idea(When a person with authority says it is appropriate) 6. Test of the big four (greed, speed, laziness, or haziness)((The four characteristics of decision making that may lead you astray or toward the wrong course of action. The four factors of speed are greed, speed, laziness, or haziness) 7. Gag test(When you gag at the prospect of carrying it out)

Consumerism

A social movement seeking to augment the rights and powers of buyers in relation to sellers

Social screens - positive and negative

A technique used to screen firms for socially-responsible investment purposes -Negative: Choose not to invest in a company because they are not socially responsible -Positive: Choose to invest in a company because they are socially responsible

Corporate Citizenship and likely outcomes

A term used to collectively embrace the host of concepts related to CSR. 1. improved employee relations 2. improved customer relationships 3. enhanced company marketing 4. improved business performance

Sweatshops

A working environment typically characterized by poor conditions, unsafe or unhealthy work practices, low pay, and sometimes child labor and where employees have little opportunity to redress these conditions

Utilitarianism -Act Utilitarianism vs. Rule Utilitarianism -Components of utilitarianism

Act Utilitarianism- examines the consequences of each action in isolation -Decision makers must look beyond self-interest to consider interests of others -Actions that break the law are considered immoral -Actions that violate individual rights are considered immoral Rule Utilitarianism-examines the consequences of policies or practices that guide actions across multiple situations and establishes rules that maximize utility over time A consequential (teleological) principle -Focus on the consequences or results of one's actions to determine whether behaviors are ethical -"We should always act so as to produce the greatest ratio of good to evil for everyone" -"The greatest good for the greatest number" •Advantages: -Focus on general welfare, or common good -Cost -benefit analysis -Forces us to think in stakeholder terms -Actions fit the complexities of the decision (not inherently good or bad) •Disadvantages: -Ignores actions that may be inherently wrong -"Ends justify the means" -May conflict with justice -Increase in total good may ignore the *distribution* of good -Difficult to formulate rules for decision making

Ad Creep

Advertising is increasingly found everywhere one looks

Agency problems

Are developed when the interests of the shareholders were not aligned with the interest of the manager, and the manager(who is simply a hired agent with the responsibility of representing the owner's best interest) began to pursue self-interest instead of the owners best interests.

Stakeholder synthesis approach to stakeholder management

Balanced view; fiduciary(financial) responsibility to owners, moral responsibility to stakeholders

Whistle-blowers and Sarbanes Oxley Act

Protections provided by the Sarbanes-Oxley Act A federal law that established sweeping auditing and financial regulations for public companies. Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices

Benefits, side effects and costs/challenges/disadvantages of Technology

Benefits of Technology •Increased production •Reduced need for human labor •Increased safety •Increased leisure time •Increased standard of living •Increased life expectancy •Increased sharing of information Costs of Technology Environmental pollution Depletion of natural resources Technological unemployment Creation of unsatisfying jobs Disconnection from others in our immediate social environment Overwhelmed by information/communication Loss of privacy Side Effects of Technology -Environmental Pollution (Most undesirable) -Depletion of Natural Resources (fuel and power shortages) -Technological Unemployment (Machines take place of humans, technology based jobs are being moved offshore) -Creation of Unsastifying jobs (Many jobs fail to give workers a sense of accomplishment)

Enlightened self-interest argument

Businesses must take actions to ensure long-term viability. "If businesses do not respond on its own, it's role in society may be altered by the public. For example, through gov't regulation or alternative economic systems"

Backdating

Recipient given option of buying at yesterday's price,resulting in immediate and guaranteed wealth increase

CERES and Global Reporting Initiative

CERES Coalition for Environmentally Responsible Economies Nonprofit national network of investors, environmental organizations, and other public interest groups working to address sustainability challenges and promote social performance reporting Global Reporting Initiative ​GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance and social well-being. This enables real action to create social, environmental and economic benefits for everyone. The GRI Sustainability Reporting Standards are developed with true multi-stakeholder contributions and rooted in the public interest.

Weyco Corporation and their smoking policy

Completely eliminated tobacco use • 2003 - policy not to hire tobacco users • 2004 - implemented voluntary testing ($50 fine for refusing) • 2005 - refusal of test or positive test = termination - Even outside of work • Random testing - Failure - sent home without pay for a month - When return, sign letter agreeing to daily testing - Next failed test = termination • 2006 - extended program to spouses - $50 fine for refusing

Descriptive ethics

Concerned with describing, characterizing, and studying the morality of a people, an organization, a culture, or a society "what is"

Normative ethics

Concerned with supplying and justifying a coherent moral system of thinking and judging. Seek to uncover, develop, and justify basic moral principles that are intended to guide behavior, actions, and decisions.

What does CPSC stand for and what do they do?

Consumer Product Safety Commission: An independent agency of the United States government. The CPSC seeks to promote the safety of consumer products by addressing "unreasonable risks" of injury; developing uniform safety standards; and conducting research into product-related illness and injury

Comparable worth

Controversial idea that suggests that workers doing different jobs should receive the same pay if those jobs have the same inherent worth and contribute equally to a firm's performance. - The idea is typically applied in an effort to make sure that stereotypically female jobs are compensated at the same level of stereotypically male jobs

Delayed manifestation cases and market share liability

Delayed manifestation cases - delayed reactions to products appear years later after consumption of, or exposure to, the product Market Share Liability - arises in delayed manifestation cases where it is impossible to pinpoint the firm responsible in a specific case; in such instances, liability is assigned by market share

Bullet-dodging

Delaying of stock option grant until right after badnews

Costs of Regulation o Direct o Indirect o Induced

Direct costs -new agencies created, aggregate expenditures, and growth patterns of federal agency budgets Indirect costs -forms, reports, and questionnaires that business must complete to satisfy requirements of regulatory agencies Induced costs -diffuse and elusive -Innovation may be affected/reduced as a byproduct -New investments in plant & equipment may be affected -Small business may be adversely affected

Due care theory vs. contractual theory vs. social costs theory

Due Care Theory - Focuses on the relative vulnerability of consumers (less information and expertise) - This imbalance creates an ethical obligation for the organization/seller Contractual Theory - Focuses on the legal contract between the firm and the customer Social Costs Theory - Basic idea: if a product causes harm, the firm should pay the costs of injury, even if the firm has met its contractual obligations, exercised due care, and taken reasonable precaution - Serves as the basis for the concept of strict liability and its extensions into the idea of absolute liability (To be discussed next)

Economic regulation vs. Social regulation

Economic Regulation: regulating business behavior through the controlling and influencing of economic or market variables such as prices (max and min), entry/exit from markets, and types of service offered. The classical or traditional form of regulation. Social Regulation: the furtherance of societal objectives by focusing on business's impacts on people (employees, consumers, and citizens). The new form of regulation , focuses on societal objectives rather than markets and economic variables. -Generally cut across all industries rather than targeting practices in a few industries

First sector vs. second sector vs. third sector

Economic Sectors • First Sector - For-profit business ($ through profit) • Second Sector - Government ($ through taxes) • Third Sector - Non-profit organizations ($ through philanthropy)

Product Placement

Embedding product in movies and TV shows

Griggs vs. Duke Power - What did it establish/clarify?

Employees transferring to another department had to have a high school diploma or pass a standardized intelligence test Requirement excluded a disproportionate number of minority workers It is the consequences of an employer's actions, not its intentions, that determined whether discrimination had taken place

Employment-at-will

Employers can fire employees at any time for any reason, as long as they don't violate federal discrimination laws, state laws, or union contracts Legal Challenges to Employment at Will - Public Policy Exceptions (recognized by 43 states) • Refuse to commit crimes or try to take advantage of privileges they are entitled to by law - Implied Contract Exceptions (recognized by 42 states) - Good Faith Principle (recognized by 20 states) • Must show employees had every opportunity to improve their performance before termination

Enterprise rights vs. statutory rights

Enterprise rights- Rights willingly granted by the employer or organization Statutory Rights- Rights provided by law

What does EEOC stand for and what do they do?

Equal Employment Opportunity Commission (EEOC): the major federal body created to administer and enforce job bias laws - Oversees claims of employment discrimination

Bioethics

Ethical issues emerging from the fields of genetics and biotechnology

Traditional/classical view of CSR

Evolution of Corporate Social Responsibility (CSR) What is a company expected to do outside of it's business? Businesses should only help socially in a way that helps them make more money Evolution of Corporate Social Responsibility (CSR) • Economic Model (Traditional or Classical) - Adam Smith's "invisible hand" = self interest --> social interest - Business' pursuit of profits = society's best interest

Arguments for/against CSR

FOR: 1. enlightened self-interest: CSR creates a more sustainable business environment and helps increase profits. 2. helps ward off increases in government regulation. 3. builds public support and increases legitimacy 4. ethical ideals, the fundamental belief that it is the right thing to do (not discussed explicitly in the text) AGAINST: 1. Classic economics, CSR is not a valid purpose or responsibility of business. 2. Business is not equipped to do it well. 3. Business has too much power already (society shouldn't encourage further growth of business power). 4. Focusing on CSR hurts business competitiveness.

What is the FLMA and what does it say?

Family and Medical Leave Act - 12 weeks of unpaid leave for family needs - Must be reinstated in their old jobs or equivalent jobs - Must provide health benefits during leave periods

Principle of Rights

Focuses on basic individual rights that cannot be violated for the sake of utility When rights are in conflict, they can be ranked according to how basic/important they are Actions are ethical to the extent that they respect fundamental rights Moral rights (do not depend on legal system) vs. legal rights -Negative rights: right to be left alone -Positive rights: the right to something Advantages: -Expresses morality from the point of view of the individual -What is due each individual? Promotes individual welfare -Limits appeals to society's aggregate benefit Disadvantages: -How do you prioritize? -Dilution of rights -Politicization of rights

FCPA, what is it?

Foreign Corrupt Practices Act One of the first initiatives by a major government to address the problem of corruption and bribery in international business. Before this, many of the payments and bribes made by the us based MNCs were not illegal.

Spring-loading

Granting at current price with knowledge thatsomething favorable is about to happen for thecompany

Grease payments vs. bribery

Grease Payments: -Payments to officials to get them to do what they are supposed to do -Commonplace in many countries -Legal according to the FCPA (A grease payment is a payment made to the international or government agencies to get a transaction or a deal done faster. The grease payment depends only on the intention for which it is made. If grease payments are made to influence the decision of the government in a favourable manner, it is considered as illegal and as a bribe.) Bribes: -Relatively large amount of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might not take (The bribery is the payment made in any form to any of the international or government agencies with an intention of achieving favorable results or deals. A bribery could be anything from a precious gift to any sum of money or any help or service.)

Disparate impact, how it is measured/determined? If given an example, can you calculate the threshold?

Griggs vs. Duke Power Case • Employees transferring to another department had to have a high school diploma or pass a standardized intelligence test• Requirement excluded a disproportionate number of minority workers • It is the consequences of an employer's actions, not its intentions, that determined whether discrimination had taken place - Four-Fifths Rule (80% Rule) • If a member of a minority group does not have a success rate of at least 80 percent that of the majority group, the practice may be considered to have an adverse impact unless business necessity can be proven • Show Math Example

Hard money vs. Soft money

Hard Money: donations made directly to candidates Soft Money: contributions made to political parties instead of to political candidates

Nestle - Infant Formula controversy - background, details

In the late 1960s, Nestle' was criticized by social activists for its marketing of powdered milk formula for infants in less developed countries. Free samples were distributed at maternity units, and by sales representatives dressed as quasi-medical personnel. The criticism was that third-world mothers were being persuaded that infant formula was better for their babies than breast milk. Formula feeding could cause infant deaths in three ways: 1. babies were unprotected against illness because they did not receive the essential antibodies contained in breast milk; 2. mothers were either ignorant of the need to use sterilized water, or could not afford to boil water, and thus prepared infant formula with contaminated water, and; 3. mothers could not afford the price of the product and saved money by diluting the amount of formula in each feed, causing malnutrition

Iron law of responsibility

In the long run, those who do not use power in a manner society considers responsible will tend to lose it

Characteristics of pre-corporate vs corporate period

In the pre-corporate period, the owners were also the managers, and therefore ownership and control were combined. In the Corporate period, ownership was separated from control by the intervention of a board of directors. (Theoretically, the board should have kept control on behalf of the owners, but it did not always turn out that way.) Shareholders->BOD->Management

Outside vs. inside directors

Inside directors have ties of some sort to the firm. Sometimes they are top managers in the firm; at others, insiders are family members or others with a professional or personal relationship to the firm or the CEO. Outside directors are independent from the firm and its top managers. They can come from a variety of backgrounds but the one thing they have in common is that they have no other substantive relationship to the firm or its CEO.

Internal stakeholders vs external stakeholders

Internal: -Owners -Stakeholders -Employees -Managers External: -Government -Consumers -Environment -Community

Kant's Categorical Imperative

Summary: -"Act only according to that maxim whereby you can, at the same time, will that it should become a universal law." Three maxims: -First Maxim: A person acts morally if his or her conduct would, without condition, be the "right" conduct for any person in similar circumstances -Second Maxim: Conduct is "right" if it treats others as ends in themselves and not as means to an end -Third Maxim: A person acts morally when he or she acts as if his or her conduct was establishing a universal law governing others in similar circumstances

What are the four elements to the Consumer Magna Carta?

JFK's Special Message on "Protecting the Consumer Interest" - Right to Safety - Right to be Informed - Right to Choose - Right to be Heard

Socialism vs. Capitalism

Key Features of Capitalism: -Private Ownership of the Means of Production -Free-Market System (not controlled by government or monopolies) -Competitive Markets (prices determined by buyers and sellers) Key Features of Socialism: -Government Ownership of the Means of Production -Private Ownership of Private, Non-productive Property -More Government Involvement in Planning including, in some cases, Centralized Planning (to prevent waste) -Greater Price Controls, subsidies, and Regulations Governing Pricing

LDCs, what are they?

Less-developed countries Most challenging situation for MNCs Where charges of exploitation, human rights violations, and abuse of power seem more plausible.

Caveat venditor vs caveat emptor

Let the Buyer Beware vs. Let the Seller Take Care

Kohlbergh's Theory of Moral Development -Where do most adults operate at? -Preconventional vs. Conventional vs. Postconventional (what motivates each) -Six stages - what are they? (by name) - if given examples, match with stage

Level B-Conventional Level Focus: Benefit to Others Preconventional: Decisions are not focused on right and wrong per se,but on the consequences of the actions for oneself. (Benefit to self) Conventional: Concepts of right and wrong are generally determined by others' expectations, social norms, or the law (Benefit to others) Postconventional: Concepts of right and wrong are associated with underlying moral principles that are dissociated from the effect on oneself (Benefit to Humankind) 6 Stages: Stage 1-Reaction to Punishment Stage 2-Seeking of Rewards Stage 3- Good Boy/Nice Girl Morality Stage 4-Law and Order Morality Stage 5 -Social-contract orientation Stage 6-Universal ethical principle orientation

Carbon neutrality

Maintains a balance between the carbon dioxide it produces and the carbon dioxide it uses

Macro-level vs micro-level legitimacy

Micro level legitimacy- individual business firms achieving and maintaining legitimacy by conforming its activities to societal goals, values, and expectations Macro level legitimacy- the totality of business enterprises, the corporate system

Global Reporting Initiative

Most widely used framework in the world for reporting indicators of sustainability

Offshoring

Moving jobs from one country to another

MVCs, what are they?

Multinational corporation Operate with offices, factories, and headquarters in more than one country. Most major corporations in the US are MNCs

Strategic approach to stakeholder management

Narrow view; emphasizes the fiduciary (financial) obligation to owners/shareholders only to extent they influence the organization's ability to maximize profits

Three ways of dealing with negative externalities?

Taxation: make the externality cost $$$ (if polluting the company is getting a fine) Regulation: regulate the externality away (You WILL NOT pollute or we will shut you down) Property Rights: ensure that all areas have clearly defined property rights (Who does own that river and who does own that lake and if someone wants to sue the business because they are polluting, they can do so)

Negative externalities vs. Positive externalities (be able to identify examples)

Negative externalities: spillover effects that result in unplanned or unintended side effects on others (air pollution, water pollution, toxic waste) Positive externalities: spillover effects where individuals gain benefits in an unplanned or unintended side effect The presence of externalities or spillover effects lead to transactions that are not socially optimal from an economic perspective. Individuals who are not directly involved in the transaction suffer costs involuntarily (negative externalities) or gain benefits (positive externalities) When externalities exist, then goods or services with negative externalities tend to be over-produced (because the full cost of the good or service is not included in the transaction price) and goods or service with positive externalities tend to be under- produced (because the full value is not recognized in the transaction)

Negative and positive externalities

Negative externalities: spillover effects that result in unplanned or unintended side effects on others (air pollution, water pollution, toxic waste) Positive externalities: spillover effects where individuals gain benefits in an unplanned or unintended side effect The presence of externalities or spillover effects lead to transactions that are not socially optimal from an economic perspective. Individuals who are not directly involved in the transaction suffer costs involuntarily (negative externalities) or gain benefits (positive externalities) When externalities exist, then goods or services with negative externalities tend to be over-produced (because the full cost of the good or service is not included in the transaction price) and goods or service with positive externalities tend to be under- produced (because the full value is not recognized in the transaction)

NAFTA, what is it?

North American Free Trade Agreement A trade agreement between North America that reduce tariffs, eliminate trade barriers, create a common market, and increase trade/investment. Canada, United States, and Mexico can trade more easily Which countries do NAFTA take place in? Which countries are involved? -Canada, United States, and Mexico What is a negative outcome the NAFTA provides? Things that are legal in that country may go into the another country where it is illegal like marijuana that may come from Mexico can go into the United States.

What does OSHA stand for and what do they do?

Occupational Safety and Health Administration "To assure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance."

Transparency

Operating in a way that is easy of others to see how actions were performed or how decisions were made in order to increase openness and accountability

Population hypothesis vs. Individual hypothesis

Population Hypothesis:A distribution of the three models that approximates a normal curve.Population hypothesis Individual Hypothesis:The three models operate at various times/circumstances

Stakeholder power/urgency/legitimacy

Power - Ability or capacity to get something done. Urgency - Degree to which the stakeholder claim on the business calls for the business's immediate attention or response Legitimacy - Perceived validity or appropriateness of stakeholder's claim to a stake.

Ethical egoism

Principle based on the idea that the individual should seek to maximize his or her own self-interests as a legitimate factor -AS LONG AS ACTIONS DO NOT VIOLATE THE LAW

Lobbying

Process of influencing public official to promote or secure the passage or defeat of legislation. -Attempts to influence legislators to take actions consistent with one's interests-Lobbyists are subject to regulation-Done by business, but also labor unions and social interest groups Professionalization of the art of persuasion. It is not only a technique for gaining legislative support or institutional approval, it can also be directed towards the reinforcement of established policy of the defeat of proposed policy shifts.

Pluralism

Refers to a diffusion of power among society's many groups and organizations. "A pluralistic society is one in which there is wide decentralization and diversity of power concentration." (In other words power is dispersed among many groups and people. It is not in the hands of any single institution) What are the strengths of pluralism? -Prevents power from being concentrated in the hands of a few. -Maximizes freedom of expression and action. -Provides for a built-in set of checks and balances so that no single group dominates. What are the weaknesses of Pluralism? -It creates an environment in which diverse institutions pursue their own self-interests, with the result that there is no unified direction to bring together individual pursuit. -Groups and institutions proliferate to the extent that their goals tend to overlap, thus causing confusion as to which organization best serve which functions.

Major activities/responsibilities of the FTC

Regulatory Agency: -Maintain free and fair competition in the economy -Protect consumers from unfair or misleading practices

Definition of (and differences): -Teleological theories -Deontological theories -Aretaic theories

Teleological theories Focus on the consequences or results of actions to determine ethical behaviors Deontological theories Focus on the duties of the decision maker that determine what needs to be considered for the decision to be ethical Aretaic theories Focus on individual character and virtue as guides to decision making

Hierarchy of authority

Shareholders v v Board of Directors v v Management v v Employees

Quid pro quo sexual harassment vs. Hostile work environment

Something is given or received for something else

Codes of conduct

Statements that define acceptable (and unacceptable) behavior at the organization, industry, or professional level

Issues management

Tend to evolve over time and represent an ongoing area of concern. Issues Management Process: -Identification of Issues -Analysis of Issues -Prioritization of Issues -Formulation of Issue Responses -Implementation of Issue Responses -Evaluation, Monitoring and Control of Results 2 approaches: Conventional Approach: -Narrowly focused -Issues fall within the domain of public policy or public affairs management Issues have a public policy/affairs orientation -Any trend, event, controversy or public development that might affect the corporation -Issues originate in social, political, regulatory or judicial fields Strategic Management Approach: -Broadly Inclusive -Typically responsibility of senior line management or strategic management staff -Issues identification is more important that it is in the conventional approach -Issues management is seen as an approach to the anticipation and management of external/internal challenges to the company strategies, plans, and assumptions.

Crisis management -Four Stages of Crisis Management -Types of Crises

Tend to occur abruptly and often cannot be anticipated or predicted and threaten the viability of an organization -More Urgent -More Sudden Five steps in Managing Crisis: -Identifying areas of vulnerability -Developing a plan for dealing with threats -Forming Crisis teams -Simulation Crisis Drills -Learning from Experience

Johnson & Johnson Tylenol Case - background/details

The 1982 the Tylenol poisonings was the case that put "crisis management" into the permanent management lexicon. The facts are legendary. In the fall of 1982, a murderer added 65 mg of cyanide to some Tylenol capsules while they were on store shelves. Seven people were killed, including three persons in one family. J&J, makers of Tylenol, quickly recalled and destroyed 31 million bottles at an expense of about $100 million. James Burke, the company CEO, made numerous appearances in TV ads and in news conferences notifying consumers of the actions the company was taking. Tamper-resistant packaging was quickly introduced, and the sales of Tylenol swiftly snapped back to near pre-crisis sales levels. The perpetrator of this crime was never found.Many continue to hold the Tylenol case up as the classic response to a crisis. Experts argue that fessing up and taking quick corrective action is the best form of crisis management. A major lesson to come out of the Tylenol crisis is that companies can take action quickly and effectively and prosper in spite of extreme adversity that befalls them. Even today, 30 years later J&J's response in the Tylenol scandal remains the gold standard in crisis management and is still taught in Universities across the world as an outstanding of effective crisis control.

What does FDA stand for and what do they do?

The Food and Drug Administration is responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices; and by ensuring the safety of our nation's food supply, cosmetics, and products that emit radiation.

Technological Determinism

The idea that what can be developed will be developed (i.e. technological advances often occur without consideration of ethics or side effects)

Greenhouse effect

The prevention of solar heat absorbed by our atmosphere from returning to space which is thought to lead to or create global warming

PACs - what are they?

The principal instruments through which business uses financial resources to influence government. Arguments for PACs: PACs are a reasonable means that like-minded persons may use to organize their contributions to candidates for office Arguments against PACs: PACs expect something in return other than good government; can lead to differing treatment for those who give and those who do not

Corporate transparency

The process of making decisions, processes, and activities more visible to those not directly involved which opens those practices up to more external scrutiny

Social contract

This is a set of two way understandings that characterize the relationship between major institutions - in our case, business and society. -Formal: Laws & Regulations -Informal: Shared understandings, mutual expectations, unspoken components (2 weeks notice, severance pay) -Is Bi directional: What is expected from each other -Continues to expand: Society's expanded expectations of business

Type I errors vs. Type II errors

Type 1 Error - false positive - E.g. An honest person found guilty through integrity test Type 2 Error - false negative - E.g. A guilty person is found innocent

Clean Air Act

U.S. Government Response Issue: Air Quality Legislation (Clean Air Act) Introduced Emissions Trading (Cap and Trade) Intended to reduce a particular pollutant Allows companies to increase pollution from one plant if the reduce pollution from another Allows companies that reduce pollution to sell the rights to increase pollution to other firms

Types of Lobbying

Umbrella Organizations (Broad Representation) collective business interests of the US (i.e. Chamber of commerce and National association of manufacturers) Trade Unions (Midrange Representation) Many firms in a given industry or line of business. (i.e. National Automobile Dealers Association, National association of home builders, the national association of realtors, the tobacco institute) Company Lobbying (Specific Representation) (i.e. IBM, AT&T, Ford and Delta)

Invisible hand

When businesses are motivated to make money, they make decisions that are in their own self interest, and that are going to benefit them, but we have faith and trust that they are going to be good neighbors. If they are not, it's not going to be in their own good self interest. Self Interest=Social Interest Business pursuit of profits=society's best interest i.e -Tax breaks -Sales may increase because they are partners in the community -Good employees

Ethical Lag

When the speed of technological change exceeds the speed of the ethical development related to it

Moral Licensing

When we do something that feels virtuous, it often makes us feel entitled to do something self-indulgent. (consciously or subconsciously) Moral licensing effect is a subconscious effect that operates by providing a boost to one's moral self-concept which then increases the preference for a relatively less moral (or even immoral) action and subsequently dampening the negative self-attribution that would normally be associated with such behavior

Ethical relativism

When we pick and choose which source of norms we wish to use on the basis of what will justify our current actions or maximize our freedom -Not absolute moral viewpoints! -Constantly changing to fit the current situation

WARN Act

Worker Adjustment and Retraining Notification Act (WARN Act) - Firms with 100 or more workers must provide 60 days advance notice to employees before shutting down or conducting substantial layoffs

Outsourcing

contracting a business function previously done in-house to an external provider

Core values

deeply ingrained principles that guide all of a company's actions and decisions, and serve as cultural cornerstones

Age Compression

kids getting older younger - marketers targeting 8- and 9-year-olds with products once meant for teenagers

"Reasonable person" standard

• Based on Perceptions - and thus open somewhat to interpretation - Reasonable Person Standard to Determine Harassment focuses on: 1. Frequency of Harassment 2. Severity of Harassment 3. Threatening or Humiliating Aspects of Harassment 4. Interference with Work Performance

Women vs men pay discrimination

• Equal Pay - On average, women in the workplace earn approximately 75 cents for every dollar earned by men • Some Legitimate Reasons: - Men tend to choose to go into higher-paying professions (or specialties) - Men tend to work longer hours (partly because women still tend to take on greater household responsibilities) - Men have fewer employment gaps - Men tend to focus more on the financial aspects of work, whereas women tend to focus on other aspects of work (e.g. social support) - Men tend to be more aggressive negotiators

Positive rights vs. negative rights

• Positive Rights - rights to something (e.g. right to health care, working conditions) • Negative Rights - rights that shouldn't be prohibited (e.g. free speech, religion)