business ethics chapter 4

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pro-competitive legislation

encourage competition and prevent activities that restrain trade

Sherman antitrust 1890

prohibits monopolies

robinson-Patman Act, 1936

Bans price discrimination between retailers and wholesalers

digital millennium copyright act, 1998

Refines copyright laws to protect digital versions of copyrighted materials, including music and movies

Fraud enforcement and Recovery Act

Strengthens provisions to improve the criminal enforcement of fraud laws, including mortgage securities fraud, financial institutions fraud, commodities fraud, and fraud related to the federal assistance and relief program

What law exempted a particular industry

McCarran - Ferguson Act

consumer protection law

Upton Sinclair, the Jungle, laws that protect consumers

Pure Food and Drug Act, 1906

Prohibits adulteration and mislabeling of foods and drugs sold in interstate commerce

Nutritional Labeling and education act, 1990

prohibits exaggerated health claims and requires all processed foods to have labels showing nutritional information

Occupational Safety and Health Administration

Makes inspections to ensure a safe working environment.

Sustainability

meeting the present needs without compromising the ability of future generations to meet their own needs

Title VII of the Civil Rights Act of 1964

prohibits discrimination in employment on the basis of race, color, sex, religion, or national origin

Occupational Safety and Health Act, 1970

designed to ensure healthful and safe working conidions for all employees

Pregnancy Discrimination Act, 1978

Prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions

Americans with Disabilities Act, 1990

Prohibits discrimination against people with disabilities and require that they be give n the same opportunities as people without disabilities

environmental Protection Agency

created to coordinate environmental agencies to enforce environmental laws

Clean Air Act, 1970

Established air-quality standards; requires approved state plans for implementation of the standards

Endangered Species, 1973

provides a program for the conservation of threatened and endangered plants and animals and the habitats in which they are found

Oil pollution act, 1990

streamlined and strengthened the EPA;s ability to prevent and respond to catastrophic oil spills; a trust fund financed by a tax on oil is available to clean up spills when the responsible party is incapable of doing so or unwilling to do so

gatekeepers

overseers of business action; accountants, regulators, lawyers, financial rating firm, auditors

public company accounting oversight board

monitors accounting firms that audit public corporations and establishes standards and rules for auditors in accounting firms

Consumer Financial Protection Bureau

an independent agency within the federal reserve system that regulates the offering and provision of consumer financial products or services under the federal consumer financial laws. protects average consumer activities, ex: mortgages

cause-related marketing

ties an organization's products to a social concern through a market program

strategic philanthropy

the synergistic and mutually beneficial use of a company's core competencies and resources to deal with social issues

four major benefits (Relate to business' contributions to stakeholders)

improves quality of life in communities
reduces government involvement
develops employee leadership skills
helps create an ethical culture

voluntary practices

the beliefs, values, and voluntary contractual obligations of a business

philanthropy

giving back to community and causes

core practices

best practices, often encouraged by legal and regulatory forces as well as industry trade associations

Better Business Bureau

a leading self-regulatroy body that provides directions for managing customer disputes and reviews advertising cases

mandated boundaries

externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements

civil law

the rights and duties of individuals and organizations (including businesses)

criminal law

not only prohibits specific actions-such as fraud, theft, or securities trading violations, but also imposes fines or imprisonment as punishment for breaking the law

Ethical issue intensity

relevance or importance of an ethical issue to an individual, work group, and or organization

moral intensity

relates to a person's perception of social pressure and the harm his/her decision will have on others

gender

differences between men and women. Women are generally more ethical than males

education

work experience, nationality and age affect ethical decision making

Nationality

legal relationship between a person and the country in which he or she is born

Locus of control

individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements

external control

go with the flow because that's all they can do

internal control

believe that they can control the events' are masters of their destinies and trust in their capacity to influence their environment

Ethical decision making process

1)ethical issue intensity
2)individual factors
3)organizational factors

corporate culture

set of values, norms, and artifacts, including ways of solving problems that members of an organization shares

ethical culture

whether the firm also has an ethical conscience

significant others

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

obedience to authority

another aspect to influence that significant others can exercise; helps to explain why many employees unquestioningly follow superior's orders

opportunity

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

immediate job context

where they work, whom they work with, and the nature of the work

leadership

ability or authority to guide and direct others toward achievement of a goal; employees give the person power

transactional leaders

attempts to create employee satisfaction through negotiating ex: coercive, and pacesetting

transformational leaders

strive to raise employee's level of commitment and to foster trust and motivation ex: the rest of them

coercive leader

demands instant obedience and focuses on achievement, initiative, and self control

authoritative leader

inspires employees to follow a vision, facilitates change, and creates a strongly positive performance climate

affiliative leader

values people, their emotions and needs, friendships and feelings

democratic leader

relies on participation and teamwork to reach collaborative decisions

pacesetting leader

can creative a negative climate because of the high standards that he or she sets

coaching leader

builds a positive climate by developing skills to foster long-term success, delegating responsibility, and issuing challenging assignments

moral philosophy

specific principles or rules that people use to decide what is right or wrong
no single moral philosophy is accepted by everyone

economic value orientation

associated with values that can be quantified by monetary means

idealism

a moral philosophy that places special value on ideas and ideals as products of the mind

realism

the view that an external world exists independently of our perception of it

goodness theories

typically focuses on the end result of actions and the goodness/happiness created

consequentialism

assesses moral worth by looking at the consequences for the individual

enlightened egoists/egoism

take a long-term perspective and allow for the well-being of others

egoism

maximizes personal interests. Right or acceptable behavior ... defines right or acceptable actions as those that maximize a particular persons self-interst as defined by the individual

Rule utilitarians

determine behavior based on principles designed to promote the greatest utility. if there is a rule you follow it

act utilitarians

examine a specific action itself; not the rules governing it.

utilitarianism

seeks the greatest good for the greatest number of people

pluralists

take the opposite position that no one thing is intrinsically good

instrumentalists

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

obligation theories

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

deontology

moral philosophies that focus on the rights of the individuals and on the intentions associated with a particular behavior

nonconsequtialism

a system of ethics based on respect for persons

categorical imperative

if you feel comfortable allowing the entire world to see your actions, and your rationale is suitable to become a universal principle, then the act is ethical

rule deontologists

conformity to general moral principles determines ethicalness

act deontologists

actions are the proper basis on which to judge morality

teleology

an act is consiered morally right or acceptable if it produces some desired result such as pleasure, knowledge, career growth, the realization of self-interest, utlity, wealth, or even fame

relativist perspective

individuals and groups derive definitions of ethical behavior subjectively from experience

virtue ethics

ethical behavior involves adhering to conventional moral standards and considering what a mature person with "good" moral character would deem appropriate

justice

fair treatment and due reward in accordance with ethical or legal standards

distributive justice

an evaluation of the results of a business relationship

procedural justice

considers the processes and activities that produce outcomes or results

interactional justice

based on the relationships between organizational members, including the way employees and management treat one another

Kohlberg's Theory:
Also study the model of cognitive moral development (6 pg. 167)

shows that individuals can change or improve their moral development

model of cognitive moral development

1. punishment and obedience
2. individual instrument purpose and exchange
3. mutual interpersonal expectations, relationships, and conformity
4. social system and conscience maintenance
5. prior rights, social contract, or utility
6. universal ethical principles

6 can be reduced into 3

1. With immediate interests and with rewards and punishments- usually associated with small children using the labels "good" and "bad". could also exemplify the acceptance of gifts in the workplace. (punished or not punished)
2. concern with right as expected by the larger society or some significant reference group- an individual equates right with conformity to the expectations of good behavior of the larger society or some other significant reference group
3. seeing beyond norms, laws, and the authority of groups or individuals- make ethical decisions regardless of negative external pressures.

Reasons this is important (supposed to be 3, but I have given up): being able to resolve moral conflicts accelerates the progress of moral development. Training and education is important in this area because your maturity, knowledge, and stages in your life require different decision making skills.

Four benefits of philanthropy

Not quite sure on this answer: There is a strong evidence to suggest that both the law and sense of ethics increase voluntary corporate social responsibility practices. IN addition, research has demonstrated that when both ethical and legal responsibilities are respected through core practices, economic performance benefits.

voluntary responsibilities
1. improve quality of life and help make communities places where people want to do business/ raise families.
2. reduce gov. involvement by providing assistance to stakeholders
3. develop employee leadership skills.
4. help create an ethical culture and values that reduce misconduct

Gatekeeper examples: include accountants, lawyers, financial rating agencies, and even financial reporting services.

fiduciary responsibilities:
Sarbanes- Oxley Act oversight of corporate accounting practices.
enacted to restore stakeholder confidence after accounting fraud at Enron and others.
need for gatekeepers to uphold ethical standards and remain independent using standard methods and procedures
certify accuracy of financial statements
help gain understanding using a code of ethic.
FSGO- Places responsibility squarely on the shoulders of the firm's leadership, usually the board of directors.
2008 requirement of ethics training to all levels of the organization

Seven habits of a strong ethical leader

1. strong personal character
2. passion to do right
3. proactive
4. consider stakeholder's interest
5. Role models for the organizational values
6. transparent and actively involved in organizational decision making
7. competent managers who take a holistic view of the firm's ethical culture

Explain at least four challenges that an employee who is new to an organization and has less than two years work experience may face regarding ethical decision making.

ethical awareness, judgement, intent, and behavior include gender, education, work experience, nationality, age and locus of control.
(by the way women are more ethical than men!)

White Collar Crime

"crimes of the suite" criminals tend to be educated people in positions of power and respectability

common justifications for white-collar crime

pg. 172.
1. denial of responsibility
2. denial of injury
3. denial of the victim
4. condemnation of the condemners
5. appeal to a higher authority
6. everyone else is doing it
7. entitlement

Causes for white-collar crime

with time patterns of activities become institutionalized within the organization, and these patterns sometimes encourage unethical behaviors

companies today now rely on technology systems, anyone with the ability to hack into a system can access the highly sensitive information.

views and behaviors of an individuals' acquaintances within an organization

years following economic recessions. when companies downsize, the stressful business climate may anger employees and force others to act out of desperation.

White collar crimes evolves when corporate cultures do not have effective oversight and control over individuals' behavior.

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