92 terms

business ethics chapter 4

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.
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
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
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
differences between men and women. Women are generally more ethical than males
work experience, nationality and age affect ethical decision making
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
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
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
a moral philosophy that places special value on ideas and ideals as products of the mind
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
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
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.
seeks the greatest good for the greatest number of people
take the opposite position that no one thing is intrinsically good
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
moral philosophies that focus on the rights of the individuals and on the intentions associated with a particular behavior
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
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
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.