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business ethics test 3
Terms in this set (80)
several definitions: set of values, norms, and artifacts, including ways of solving problems shared by organizational members
the shared beliefs top managers have about how they should manage themselves and other employees and how they should conduct their business.
It's SHARED, RELATIVELY STABLE, AND FORMED OVER A LONG PERIOD OF TIME!
Sarbanes- Oxley 404
includes assessment of effectiveness of controls by management and external auditors
forces firms to adopt a set of values that make up part of the culture
includes whistle blowing
10% people are going to steal, 10% are going to require no rules and are going to be honest, the 80% ties back to kohlberg's model- employees can be taught what an ethical culture is
shows minimal concern for either people or performance. ex: countrywide financial
exhibits high concern for people but minimal concern for performance issues. ex: Ben and Jerry's
shows little concern for people but high concern for performance; interest in the organization. Ex: united parcel systems
combines a high concern for people with one for performance. ex: Starbucks
an assessment of an organization's values. Usually conducted by outside consultants; can be handled internally
organized around risk.
use a legalistic approach to ethics, revolve around risk management, not ethics. Lack of long-term focus and integrity
values-based ethics culture
rely on mission statements that define the firm and stakeholder relations. focus on values, not laws. top-down integrity is critical.
ethical corporate cultures relies upon an explicit mission statement that defines the core values of the firm and how the customers and employees should be treated.
people learn ethical or unethical behavior while interacting with others who are part of their role-sets or who belong to other intimate personal groups
exposing an employer's wrongdoing to outsiders such as the media or government regulatory agencies.
some legal protections exist: Sarbanes-Oxley Act, the FSGO, and the Dodd-frank act have institutionalized whistle-blowing protections to encourage discovery of misconduct
qui tam relator
if an employee provides information to the gov. about a company's wrongdoing, under the Federal False Claims act is known as:
one who does well for the stakeholders of the corporation. Good at getting followers to common goals effectively and efficiently
to influence that leaders and managers have over the behavior and decisions of subordinates. an individual has power when his/her presence causes people to behave differently
5 powers from which one person may influence another:
reward power, coercive power, legitimate power, expert power, and referent power
offering something desirable to influence behavior
penalizing negative behavior
the consensus that a person has the right to exert influence over other
derives from knowledge and credibility with subordinates
exists when goals or objectives are similar
a force within the individual that focuses his or her behavior toward achieving a goal
function of ability and motivation that can be represented by the equation (job performance= ability x motivation)
satisfied by social and interpersonal relationships
satisfied by creative productive actives
ability x motivation
decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to the lower level managers;
it's best for organizations that make high-risk decisions, whose lower-level managers are not skilled in decision-making, and where processes are routine.
ex: franchises, military, putting a car together
decision making authority is delegated as far down the chain of command as possible.
flexible and quicker to recognize external change.
can be slow to recognize organizational policy changes. ETHICAL MISCONDUCT MAY RESULT
ex: free agents, internal locus of control would feel more comfortable at decentralized organizations
an assembly of individuals with an organization structure that is explicitly accepted by the group.
ex: committees, work groups, and teams
two or more individuals with a common interest but without an explicit organizational structure.
ex: the grapevine, company's softball, bowling team, the band, hangouts
standards of behavior that groups expect of their members. define acceptable/unacceptable behavior within the group.
creates order by requiring that employees identity with and commit to specific required conduct.
uses legal terms, statuetes, and contractsto teach employees the rules and penalties for noncompliance
the need for organizational ethics programs
experts believe something about compliance training programs...
without it they are not trained, they do not think for themselves, its groupthink.
strong ethics program includes
written code of conduct
ethics officer to oversee the program
care in the delegation of authority
formal ethics training
auditing, monitoring, etc.
ethics program can help avoid legal problems
go to jail a less amount of time, an ethics program can help a firm avoid civil liability
Sarbanes Oxley monitoring ethical lalala
focuses more on abstract ideals, such as respect and responsibility
is most effective at creating ethical reasoning-employees learn to make values based decisions.
code of ethics
general statements that serve as principles and the basis for the rules of conduct
statement of values
serves the general public and addresses stakeholder interests.
diminishes employees trust and increase employee turnover
ethics programs must have oversight by high-ranking persons known to respect legal and ethical standards. Are responsible for managing their organization's ethics and legal compliance programs
Often contain six core values
trustworthiness respect responsibility fairness caring citizenship (honesty is the only one missing)
educate employees about policies and expectations, laws and regulations, and general standards.
make employees aware of resources, support systems, and personnel
1) start with what was the intent.
8 goals of successful ethics training programs
pg. 228. figure 8-5. (short essay remembering SIX)
furthering implementation of the ethics program
231-232 5-6 common mistakes in designing/ implementing an ethics program
describe and talk about 4 of them.
not understanding the goals of the program
not setting realistic and measurable program objectives
senior management's failure to take ownership of the program
developing program materials that do not address average employee needs
brings together people from different cultures, values, laws, and ethical standards
country cultural values
are subjective, based on the social environment, and are used to develop norms that are socially and legally enforced.
everything in our surroundings that is made by people.
*tangible or intangible
*each nation has a cultural belief about acceptable business activities
*subcultures can be found within many nations
the idea that "we" differ from "them".
OR everyone thinks it's the same as we are. waving your hand could be inappropriate in some other cultures. Touching someone, ladies got their heads covered mmm
focus on INDIVIDUALISM/COLLECTIVISM- refers to how self-oriented members of a culture are in their behavior. (276)
individualism- place high value on individual achievement and self-interest
collectivism- value working toward collective goals and group harmony
AND POWER DISTANCE.- arab nations and saudi arabia; the power inequality between superiors and subordinates
the concept that morality varies from one culture to another and that "right" and "wrong" are therefore defined differently
"When in Rome"
global common values
shared across most cultures. (reflected in laws)
desirable common values: integrity, family and community unity, equality, honest, fidelity, sharing and unselfishness
occurs when various profit centers within corporations become aware of the overall organization and aware of consequences of their actions on the firm as a whole.
*no single person can be blamed for negative outcomes that occur because of systemic problems (groupthink)
Adam smith (pg. 280)*
professor of logic and moral philosophy during the late eighteenth century. supply demand, contractual efficiency, and division of labor of various companies within england and wrote about what he say
"invisible hand" critical to capitalism (by adam smith) "Wealth of Nations"
John Maynard Keynes*
government can stimulate the private sector for example: controlling interest rates, taxation and public projects.
return to self-regulating free market system. deregulation could reach equilibrium without government intervention.
advocates that wealth and power be shared across society, shared wealth, based on the amount of work expended in production (karl marx)
*economic theories advocating the creation of society in which wealth and power are shared and distributed evenly based on the amount of work expended in production.
allows for the private ownership of property and also features a large government equipped to offer such services as education and health care to its citizens.
(formed in 1940's to offshoot socialism)
Bimodal wealth distribution
many poor and a few very wealthy with a small middle class.
some argue it is a result of the global economic system
Keynes and Friedman AGREED
1. people have rational preferences among outcomes that can be identified and associated with value
2. individuals seek to maximize utility; firms seek to maximize profits
3. people act independently on the basis of full and relevant information
assumption that people are predictable and will maximize the utility of their choices to relative to their needs and wants based on resources available
assumes that humans do not always act rationally
public companies that operate on a global scale, without significant ties to any one nation or region
highest level of international business commitment
Business for Social Responsibility
many MNCs have joined because of stakeholder scrutiny
tracks emerging issues and trends
provides information on corporate leadership and best practices
International Monetary Fund*
Bretton Woods agreement of July 1944 in which a group of international leaders decided that the primary responsibility for the regulation of monetary relationships among national economies should rest in extra-national body
*Makes short-term loans to member countries with deficits
*provides foreign currencies for its members
(promotes responsible business conduct)
United Nations Global Compact
set of 10 principles that promote human rights, sustainability, and the eradication of corruption.
founded in 1945, 192 member nations
goal to promote world peace
world trade organization
1995 at the Uruguay round of negations of the General Agreement on Tariffs and Trade. 153 members and observer nations.
*administers trade negotiations, settles trade disputes, and monitors trade policies of member nations
practice of charging high prices for products in domestic markets while selling the same products in foreign markets at low prices, often at below cost.
places local firms at a disadvantage
the US has anti-dumping laws in place
where a channel member (manufacturer, wholesaler, distributor, or retailer) has control of the entire business system, via ownership or contract, or through its purchasing ability
*reduces competition, puts small competitors out of business
Key risk areas
*Internet security and privacy
*relations with china
*political unrest, imbalances in power, nationalism, and faltering economies in emerging markets
pg. 284, 286, 290-300
12-14 business ethics and legal issues. short answer
inherent dignity with equal inalienable rights and the foundation of freedom justice, and peace in the world
(part of human rights) a major global human rights issue. RIGHT VS. PRIVILEGE? here it is still a privilege
labor and the right to work
many people work outside their homeland (distinguish between human rights)
gender pay equality
right to join unions *standards of living
the minimum wage that workers require to meet basic needs
the belief that consumers should dictate the economic structure of society.
states that consuming goods at an increasing rate is desirable
equates personal happiness with purchasing and consuming products
planned obsolescence: encourages consumers to buy more items
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