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Ethics Final Review
Terms in this set (50)
Why is studying ethics important?
Having good individual morals is not enough to stop ethical misconduct.
Ethics training helps provide collective agreement in diverse organizations.
Business ethics decisions can be complicated.
Helps to identify ethical issues when they arise and recognize the approaches available to resolve them.
What is business ethics becoming?
What is business ethics? (Principles, values)
Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or fro the legal system that primarily guide individual and group behavior in business.
Questions whether or not decisions are acceptable.
Values and judgments play a critical role.
Reflects whether the firm has an ethical conscience. Function of many factors.
Sarbenes Oxley/Dodd Frank Wall Street/FSGO
Sarbanes-Oxley act - 2002, Congress passed this to establish federal oversight of corporate accounting practices.
Dodd-Frank Wall Street reform and consumer protection act - Established in 2010 to increase accountability and transparency in the financial industry and protect consumers from deceptive financial practices.
Maximizing the entire positive outcome and minimizing the negative to society from business stand point.
4 Levels: Economic, Legal, Ethical, Philanthropic
Economic: Maximizing stakeholder wealth and/or value.
Legal: Abiding by all laws and government regulations.
Ethical: Following standards of acceptable behavior as judged by stakeholders.
Philanthropic: Giving back to society.
How well businesses meet their economic, legal, ethical, and philanthropic responsibilities.
Mechanism for company to control top management team
Accountability - How closely workplace decision align with a firms strategic direction.
Oversight: A system of checks and balances to minimize opportunities for misconduct.
Control: The process of auditing and improving organizational decision and actions.
Stakeholder Orientation and Interaction Model
The degree to which you understand stakeholders and how well you listen to them. Interaction is the communication with the stakeholders.
Bribery, Harassment, Privacy, Conflicts of interest, Fraud
Concept of Optimization, Honesty, Trust, Integrity
Trade off between equity and efficiency
Honesty, Fairness, Integrity
Honesty - Truthfulness or trustworthiness
Fairness - The quality of being just, equitable, and impartial
Integrity - Uncompromising adherence to ethical values
The practice of offering something in order to gain an illicit advantage.
Conflicts of Interest
Cause Related Marketing
When marketing campaign is linked to a social problem in the current time
Aspects of Institutionalizations of Social Responsibility
Civil and Criminal Law
Civil Law: Defines the rights and duties of individuals and organizations.
Criminal Law: Prohibits specific actions and imposes punishments for breaking the law.
Habits of Ethical Leaders
1. Strong personal character.
2. Passion to do right.
4. Consider all stakeholders interest.
5. Role models for the organizations values.
6. Transparent and actively involved in decision-making.
7. Take a holistic view of the ¬firms' ethical culture.
Ethical Issue Intensity
The perceived relevance or importance of an ethical issue to the individual, work group, and/or organization.
6 Spheres of Influence
Workplace, Family, Religion, Legal System, Community, Profession
Different types of leaders
The most effective ethical leaders posses the ability to manage themselves and their relationships with other effectively, a skill known as emotional intelligence.
Transactional Leaders: Attempt to create employee satisfaction through negotiating, or bartering, for desired behaviors or levels of performance.
Transformational Leaders: Strive to raise employees' level of commitment and foster trust and motivation.
Authentic Leaders: Passionate about the company, live out corporate values daily in their behavior in the workplace, and form long-term relationships with employees and other stakeholders.
A set of values and norms that employees of an organization share.
Descriptive Relativism: Relates to observation of other cultures.
Metaethical Relativism: Proposes people see situation from their own perspectives.
Normative Relativism: Assumes one person's opinion is as good as another's.
The greatest good for the greatest number of people.
Rule Deontologist: Conformity to general moral principles determines ethicalness.
Act Deontologists: Actions are the proper basis on which to judge morality.
3 Different Types of Justice
Distributive Justice: An evaluation of the results of a business relationship.
Procedural Justice: Considers the processes and activities that produce desired outcomes.
Interactional Justice: Based on relationships between organization members, including employees and managers.
Characteristics of An Ethical Culture
4 Different Types of Organizational Culture
• Apathetic: Minimal concern for people or performance.
• Caring: High concern for people; minimal concern for performance.
• Exacting: Minimal concern for people; high concern for performance.
• Integrative: High concern for people and performance.
Different Types of Power
• Reward Power: Offering something desirable to influence behavior.
• Coercive Power: Penalizing negative behavior.
• Legitimate Power: The consensus that a person has the right to exert influence over others.
• Expert Power: Derives from knowledge and credibility with subordinates.
• Referent Power: Exists when goals or objectives are similar.
Elements of A Strong Ethics Program
• Written codes of conduct
• Ethics officers to oversee the program
• Careful delegation of authority
• Formal ethics training
• Rigorous auditing, monitoring, enforcement, and revision of program standards.
Codes of Conduct
Formal statements that describe what an organization expects of its employees.
• Code of Ethics
• Statement of Values
Common mistakes when companies design and implement ethics programs
Compliance and value based approach
Requires employee identify with and commit to specific conduct.
Uses legal terms, statutes, and contracts to teach the rules and penalties for noncompliance.
Strives to develop shared values; focuses on ideals, such as accountability and commitment.
Is more effective at creating ethical reasoning, the foundation of an organization ethical culture.
6 core values of a code of ethics
A systematic evaluation of an organization's ethics program and performance to determine whether it is effective.
3 Factors in the triple bottom line model
Steps in the auditing process
Secure management and board commitment
Establish an ethics audit committee
Define thee scope of the audit
Review organizational mission, goals, and values.
Collect and analyze relevant information
Verify the results through an outside agent
Report the findings
Concepts of rational and behavioral economics
Self referenced criteria
The unconscious reference to ones own cultural values, experiences, and knowledge.
The concept that morality varies from one culture to another.
o Believes that right and wrong is defined differently by each culture.
o Can be a rationalization for straying from one's cultural values.
4 Cultural dimensions (Hofstede)
World traits organizations
Economic structure (Socialism and Social Democracy)
Socialism: Advocates that wealth and power be shared across society, based on the amount of work expanded in production.
Social Democracy: Private ownership of property, but a large government.
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