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Business Ethics Final

Terms in this set (45)

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, and relies on friendship and trust to promote flexibility, innovation, and risk taking
democratic leader
Relies on participation and teamwork to reach collaborative decisions
pacesetting leaders
Can create a negative climate because of the high standards that he/she sets
coaching leader
Builds a positive climate by developing skills to foster long-term success, delegating responsibility, and issuing challenging assignments
transactional leaders
Create employee satisfaction through bartering for desired behaviors/performance; best suited for rapidly changing situations
transformational leaders
Raise employees' commitment and foster trust and motivation; Is best for organizations with high ethical commitment and strong stakeholder
habits of strong ethical leaders
Developed by Archie Carroll; based on Stephen Covey's The 7 Habits of Highly Effective People; have strong persona character, have a passion to do right, leaders are proactive, consider stakeholders interests, role models to organization's values, transparent and actively involved in organizational decision making, competent managers who take a holistic view of the firm's ethical culture
ethical decision making process
includes ethical issue intensity, individual factors, organizational factors
moral intensity
Relates to a person's perception of social pressure and the harm his/her decision will have on others
internal lotus of control
go with the flow because that's all they can do
external lotus of control
believe they can control events; are masters of their destinies and trust in their capacity to influence their environment
corporate culture
A set of values, norms, and artifacts that members of an organization share; The shared beliefs top managers have about how they should manage themselves and other employees and how they should conduct their business
ethical culture
Reflects whether the firm has an ethical conscience; is a function of many factors
leadership
The ability or authority to guide and direct others toward achievement of a goal
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
two dimensions or organizational culture
concern for people- The organization's efforts to care for its employees' well-being
concern for performance - The organization's efforts to focus on output and employee productivity
apathetic culture
Minimal concern for people or performance
caring culture
High concern for people; minimal concern for performance
exacting culture
Minimal concern for people; high concern for performance
integrative culture
High concern for people and performance
cultural audit
is an assessment of the organization's values; Usually conducted by outside consultants; can be handled internally
compliance based culture
use a legalistic approach to ethics; revolve around risk management and not ethics; lack of long-term focus and integrity
values based cultures
rely on mission statements that define the firm and stakeholder relations; focus on values not laws; top-down integrity is critical
differential association
The idea that people learn ethical/unethical behavior while interacting with others
whistle blowing
Exposing an employer's wrongdoing to company outsiders
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
centralized organization
Decision making authority is concentrated in the hands of top-level managers; little authority delegated to lower levels; best for organizations
decentralized organization
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
included in a strong ethics program
written code of conduct, ethics officer to oversee the program, care in the delegation of authority, formal ethics training, Auditing, monitoring, enforcement, and revision of program standards
Minimum Requirements for Ethics and Compliance Programs
standards and procedures, high-level personnel who are responsible for the program, no discretion given to individuals, standards communicated effectively, established systems of audit, consistent enforcement, continuous improvement
compliance orientation
Requires that employees identify with and commit to specified conduct; Uses legal terms, statutes, and contracts to teach employees the rules and penalties for noncompliance
values orientation
Focuses more on abstract ideals, such as respect and responsibility; Is most effective at creating ethical reasoning- employees learn to make values-based decisions
codes of conduct
Formal statements that describe what an organization expects of its employees
codes of ethics
most comprehensive; 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
core values of corporate codes of ethics
trustworthiness, respect, responsibility, fairness, caring, citizenship
ethics officers
Are responsible for oversight of the ethics/compliance program: asses needs and risks, develop and distribute the code, conduct training programs, Establish audits and control systems to ensure government compliance, Review and modify the program to improve effectiveness
Ethics training can...
Educate employees about policies and expectations, laws and regulations, and general standards; Make employees aware of resources, support systems, and personnel; empower employees
ways to monitor training effectiveness
observing employees, internal audits, surveys, reporting systems, investigations, independent audits,
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