68 terms

Ethics

STUDY
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Terms in this set (...)

ethics
study of morality and the application of reason to elucidate specific rules and principles that determine right or wrong on a given situation
morality
concerned with the norms, values, and beliefs embedded in a social process which define right and wrong
business ethics
study of business situations, activities, and decisions where issues of right and wrong are addressed; not always job of law
what is an ethical decision
right or wrong
whether consideration takes place
decision when significant effects, choice, ethically relevant to someone
framing effect
in which people react to a particular choice in different ways depending on how it is presented

e.g. go to greater lengths to avoid a loss than to obtain a gain of a smaller size
overvaluing outcomes
individuals tend to punish outcomes more harshly than bad intentions

"management by objectives" leads to focus on ends rather than means
status quo tendency
e.g. contributions to retirement place, choice of Internet privacy policies and the decisions to become an organ donor
self-enhancement bias
individuals tend to describe themselves as better people than they really are
egocentric bias
self interested outcomes are not only desirable but morally justified
escalation of commitment
individuals develop attachments to programs, activities, and investments when we feel financially, emotionally, or psychologically "invested" we retain an unreasonable commitment to that thing, remaining engages long after we should
omission bias
tendency to judge acts that are harmful as worse than omissions that are equally harmful or even more harmful.

most have to goal not to harm people but sometimes doing nothing causes harm
stages in EDM
recognize moral issue
moral judgement
intention to act
act
individual factors that influence EDM
unique characteristics of the individual making the relevant decision

i.e. old vs young, education or not, personal values, locus of control, personal integrity
situational factors that influence EDM
particular features of the context that influence whether the individual will make an ethical decision

i.e. authority, rewards, work roles, moral intensity and moral framework, organizational culture
external locus of control
go with the flow because that's all they can do
internal locus of control
believe they can control events; are masters of their destinies and trust in their capacity to influence their environment
Kohlberg's Model of Cognitive Moral Development
punish and obedience
individual instrumental purpose and exchange
mutual interpersonal expectations, relationships, and conformity
social system and conscience maintenance
prior rights, social contract, or utility
universal ethical principles
moral disengagement
process that enables people to engage in negative behaviors from small misdeed to great atrocities, without believing that they are causing harm or doing wrong
8 methods of moral disengagement
moral justification
euphemistic labeling
advantageous comparison
distortion of consequence
dehumanization
displacement of responsibility
diffusion of responsibility
attribution of blame
moral justification
process of framing harmful or morally wrong acts to be in the service of a greater good

using the "greater good" as an excuse to do something wrong
euphemistic labeling
the practice of using pleasant language to rename harmful or morally wrong acts to make them appear more benign

language to "sugar coat" the behavior
advantageous comparison
using the contrast between a behavior and an even more reprehensible behavior to make the former seem innocuous

exaggerated comparisons to make action seem less wrong
distortion of consequence
minimizing the seriousness of the effects of one's actions to feel better about it
dehumanization
framing the victims of one's actions as members of an outgroup that is undeserving of basic human consideration and unworthy moral regard
displacement of responsibility
displacement of responsibility
attributing the responsibility for one's action to authority figures who may have tactically condoned or explicitly directed one's behavior

blaming actions on superior
diffusion of responsibility
spreading blame for actions to others or assuming that that is what people would do
attribution of blame
assigning responsibility for one's actions to the victims themselves
using a framework to create better choices
understand the situation
generation alternatives
improve alternatives
craft a recommendations
dominant story of business
only shareholders matter
business is primarily about economics
limitless resources
capitalism works if people are self-interested
given opportunity business people will cheat
4 flows -- dominant story of business
business is not about economics
BE = oxymoron
people are motivated by money
the world has changed
corporation
'artificial person' in the eyes of the law
owned by shareholders
fiduciary responsibility to protect the investment of shareholders
stakeholder theory
someone who has a "stake" or claim in some aspects of a company's products, operations, markets, industry and outcomes

are affected by the business
primary stakeholders
those whose continued association is absolutely necessary for a firm's survival
secondary stakeholder
don't typically engage in transactions with a company
high power; low interest
keep satisfied
low power; low interest
monitor (minimum effort)
high power; high interest
manage closely
low power; high interest
keep informed
implementing stakeholder perspective
assessing corporate culture
identify stakeholder groups
identify stakeholder issues
assess current practices, select initiatives
identify resources, determine urgency
stakeholder feedback
CSR
the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner
nature of CSR
economic
legal
ethical
philanthropic
why do firms have social responsibility
enlightened self interest
need solve social problems they face
great power
rely on stakeholders
argument against CSR
only human beings have a moral responsibility for their actions
manager's responsibility to act solely in the interest of the shareholders
social issues and problems are the proper province of the state rather than corporate managers

"social responsibility of a business is to increase its profits"
arguments for CSR
companies cause problems therefore have a responsibility to address/prevent them
powerful social actors with access to significant resources that should be used responsibly
rely on a wider set of stakeholders than just shareholders and have a duty to take into account their interests and goals
enlightened self-interest (Business Case)
Arguments for CSR: The BC
brand value and reputation
employees and future workforce
operation effectiveness
direct financial impact
organizational growth
business opportunity
responsible leadership
risk reduction and management
marco-level sustainable development
emerging BE issues
misuse of company time/resources
abusive/intimidating behavior
lying
conflicts of interest
bribery
corporate intelligence
discrimination
fraud
sexual harassment
consumer fraud
privacy issues
institutionalization of BE
voluntary practices (beliefs, values, and voluntary policies)
core practices (documented best practices, often encouraged by legal and regulatory forces and trade associations)
mandated boundaries (externally imposed boundaries of conduct)
5 categories of law
regulating competition
protecting consumers
promoting equity and safety
protect environment
incentives to encourage organizational compliance programs to deter misconduct
SOX Act
prohibits both auditing and consulting services to the same client
require corporations to take greater responsibility for their decisions and to provide leadership based on ethical principles
Dodd-Frank Wall Street Reform and Consumer Protection Act
seeks to improve financial regulation, increase oversight, and prevent excessive risk-taking, deceptive practices and lack of oversight

created 3 new offices: Office of Financial Research, Financial Stability Oversight Council, Consumer Financial Protection Bureau

whistle-blower bounty program
white collar crime
illegal acts committed for personal and/or organizational gain by abusing the trust and authority associated with a given position

big in finance
can be committed at all levels
leadership
the ability or authority to guide and direct others towards a goal. most people agree that effective leadership is essential for a company
7 habits of a strong ethical leader
strong personal character
passion to do the right thing
proactive
consider all stakeholders' interest
role model for the organization's values
transparent and actively involved in decision making
take a holistic view of the firm's ethical culture
two approaches to leadership
compliance based
integrity based
improving ethical decisions
formal codes, rules, compliance
informal relationships-encourage teamwork
recognize stakeholders
giving the right incentives
transforming principles to values
support from leadership
signs of ethical leadership failure
lack of vision
keeping quiet
incoherence
inaction
hypocrisy
double standards
complacency
unreflective obedience
Milgram's study
Stanford Prison Experiment
Barley and Batson 1973
Social loafing/bystander effect
tug of war
Kitty Genovese
smoke in room
explanation of social loafing/bystander problem
diffusion of responsibility
audience inhibition
social influence
ways to reduce social loafing/bystander problem
call to action
someone else helps first
friends
actions known later
norms of social caring
groupthink symptoms
(Asch line study)
illusion of invulnerability
unquestioned belief in the group's inherent morality
pressure directed at those dissenting from majority view
shared illusion of unanimity
ways to avoid groupthink
eliminate leadership bias
express need to examine all alts
devil's advocate
implications for leaders
careful about relying heavily on their instinct
look ahead and anticipate ethically challenging circumstances
remember that personal values can have a powerful, shaping influence on their organizations
lead and manage their organization so that situational influences enable other people to make sound decisions
pay particular attention to their parts of an organization characterized by uncertainty, time and performance pressure, short term time horizon, and isolation
organizational ethics programs: ethical culture
leadership
education
hire individual with good character
need for organizational ethics programs
near impossible to know all relevant laws
orgs can become bad barrels with pressure to succeed
help employees determine what behaviors are acceptable
help avoid legal issues/scandals
strong ethics program includes
written code of conduct
ethics officers to oversee the program
careful delegation of authority
formal ethics training
rigorous auditing, monitoring enforcement, and revision of program standards
statement of values
code of ethics
code of conduct
benefits...
guide employees
remain in compliance with complex government regulations
minimize subjective and inconsistent management standards
reinforce - & acquaint new employees with - culture and values
communicate its expectations for its staff to suppliers, vendors, and customers
offer protection in preempting or defending against lawsuits
reasons why codes of conduct fail
not promoted and employees do not read it
not easily accessible
written too legalistically and therefore is not understandable by average employees
written too vaguely, providing no accurate direction
top management never refers to the code in body or spirit