BLAW ch 2
ethics and business decision making
Terms in this set (16)
what is business ethics
a consensus as to what constitutes right or wrong behavior in the worls of business and the application of moral principles to situations that arise in a business setting.
what are business ethics important?
they are important to the long-run viability of a corporation, and to the well being of individual officers, directors, and a firm's employees. unethical decision making can negatively effect suppliers, consumers, the community, and society as a whole.
how can business leaders encourage their companies to act ethically?
Create and maintain ethics policies and procedures and by acting ethically in decision making. Management can demonstrate a commitment to ethical practices, must not ignore unethical behavior in their employees,must communicate clearly their standards and expectation for ethical behavior, and provide ethics training programs. establish a procedure for, and a safe environment in which to, address questions and concerns involving ethics..
how do duty-based ethical standards differ from outcome-based ethical standards?
Duty based ethics evolved from traditional religious and moral perspectives focuses on action itself. Overcome based focuses on consequences of action and whether it delivers most benefits to most individuals
what are six guidelines an employee can use to evaluate whether his or her decisions are ethical?
1. THE LAW. Is the action you are considering legal? If you do not know the laws governing the action, then find out. Ignorance of the law is no excuse.
2. RULES AND PROCEDURES. Are you following the internal rules and procedures that have already been laid out by your company? They have been developed to avoid problems. Is what you are planning to do consistent with your company's policies and procedures? If not, stop.
3. VALUES. Laws and internal company policies reinforce society's values. You might wish to ask yourself whether you are attempting to find a loophole in the law or in your company's policies. Next, ask yourself whether you are following the "spirit" of the law as well as the letter of the law or the internal policy.
4. CONSCIENCE. If you feel any guilt, let your conscience be your guide. Alternatively, ask yourself whether you would be happy to be interviewed by the national news media about the actions you are going to take.
5. PROMISES. Every business organization is based on trust. Your customers believe that your company will do what it is supposed to do. The same is true for your suppliers and employees. Will your actions live up to the commitments you have made to others, both inside the business and outside?
6. HEROES. We all have heroes who are role models for us. Is what you are planning on doing an action that your "hero" would take? If not, how would your hero act? That is how you should be acting.
what types of ethical issues might arise in the context of international business transactions?
cultural differences, worker exploitation, bribery to government officials, sexual harassment, child labor
A concept developed by the philosopher Immanuel Kant as an ethical guideline for behavior. In deciding whether an action is right or wrong a person should evaluate the action in terms of what would happen if everybody else in the same situation, or category, acted the same way.
corporate social responsibility
The idea that corporations can and should act ethically and be accountable to society for their actions.
A decision-making technique that involves weighing the costs of a given action against the benefits of that action.
A reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand.
Moral principles and values applied to social behavior
The minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law.
principle of rights
The principle that human beings have certain fundamental rights (to life, freedom, and the pursuit of happiness, for example). Those who adhere to this "rights theory" believe that a key factor in determining whether a business decision is ethical is how that decision affects the rights of others. These others include the firm's owners, its employees, the consumers of its products or services, its suppliers, the community in which it does business, and society as a whole.
The purchase of shares of a company's own stock by that company on the open market.
An agreement that grants the owner the option to buy a given number of shares of stock, usually within a set time period.
An approach to ethical reasoning that evaluates behavior in light of the consequences of that behavior for those who will be affected by it, rather than on the basis of any absolute ethical or moral values. In utilitarian reasoning, a "good" decision is one that results in the greatest good for the greatest number of people affected by the decision.
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