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Business Ethics Test 1 (ch. 1, 6, 10)

Terms in this set (86)

morals
a person's personal philosophies about what is right or wrong
business ethics
comprises organizational principles, values and norms that may originate from individuals, organized statements, or from legal system that primarily guide individual and group behavior in business
principles
specific and pervasive boundaries for behavior that should not be violated
values
enduring beliefs and ideals that are socially enforced
Consumer's bill of rights
4 basic rights: right to safety, right to be informed, right to choose, right to be heard
corporate social responsibility
an organizations obligation to maximize its positive impact of stakeholders and minimize its negative impact
ethical culture
acceptable behavior as defined by the company and industry
Sarbanes-Oxley Act
made securities fraud a criminal offense and stiffened penalties for corporate fraud. most reaching change in organizational control and accounting regulations since Securities of Exchange Act of 1934
Dodd-Frank Wall street reform and consumer protection act
addressed issues related to financial crisis and recession, most sweeping financial legislation since Sarbanes-Oxley Act, designed to make the financial services industry more ethical and responsible
defense industry initiative on business ethics and conduct
developed to guide corporate support for ethical conduct
moral philosophy
specific principles or values people use to decide what is right and wrong (person-specific)
economic value orientation
associated with values and quantified by monetary means;if an act produces more economic value for its effort, then it should be accepted as ethical
idealism
belief that some things are just the product of the mind
realism
what actually happens, whats real
monist
believe only one thing is intrinsically good, often characterized by hedonism
hedonism
idea that pleasure is the ultimate good or the right and acceptable behavior as that which maximizes personal pleasure
quantitative hedonist
believe more pleasure is better
qualitative hedonist
believe it is possible to get too much of a good thing
pluralist
"non-hedonists", take the opposite position that no one thing is intrinsically good
instrumentalist
reject ideas that 1) ends can be separated from the means that produce them, 2) ends, purposes and outcomes are intrinsically good in and of themselves
goodness theory
typically focus on the end result of actions and the goodness or happiness created by them
obligation theory
emphasize the means and motives by which actions are justified and are divided into the categories of teleology and deontology
teleology
refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result such as pleasure, knowledge, career growth, etc.
consequentialism
the idea that teleological philosophies assess the moral worth of behavior by looking at its consequences
egoism
belief that the individual is the most important moral value
Thomas Hobbes: argues that we are by nature selfish, relies on process of interpreting motives: psychological egoism
charity = power
enlightened egoism
ones long term self interest but takes others well being into account
Ayn Rand: believes that we should look out for our own best interests, do whats in own interests we'd be better off // accept responsibility for our own decisions, says that "selfish" is a negative work but nothing is wrong with being concerned with ones own decisions
utilitarianism
greatest good for the greatest number of people
Jeremy Bentham: believed it was basic human nature to think like a utilitarian, "hedonistic calculus" - J.S. Mill is another utilitarian
Bentham's 7: all about happiness
1. intensity
2. duration
3. certainty/uncertainty
4. propinquity/remoteness
5. fecundity (depth)
6. purity
7. extent
rule utilitarian
determine behavior on the basis of principles or rules designed to promote the greatest utility rather than on individual expectations they encounter
act utilitarian
examine specific actions rather than the general rules or governing them to assess whether it produces the greatest utility for the greatest number of people
deontology
moral philosophies that focus on the rights of individuals and the intentions associated with a particular behavior rather than its consequences
Immanuel Kant: premier enlightenment thinker, believes that there is a moral law and its absolute, based on reason, universal and it exists in us because we are endowed with reason (he doesn't like utilitarianism)
nonconsequentialism
system of ethics based on respect for persons
categorial imperative
"act only on that maxim that you could will at the same time, to be a universal law"
rule deontologist
moral philosophy that evaluates morality on the basis of its conformity to general moral principles based on logic/respect for individual rights
act deontologist
hold that actions are the proper basis to judge morality or ethicalness, requires a person use equity, fairness and impartiality when making and enforcing decisions
relativist perspective (relativism)
definitions of ethical behavior are derived subjectively from the experiences of individuals and groups, use themselves or the people around them as the basis for defining ethical standards
Margaret Mead: sharing, exercising social trust in our society, thinks there is no right or wrong and people do things differently from one another
descriptive relativism
relates to observations of other cultures
meta-ethical relativism
proposes that people naturally see situations from their own perspectives and there is no subjective way of resolving ethical disputes between different value systems and individuals
normative relativism
assume one person's opinion is as good as another's
virtue ethics
Aristotle was Plato's student
Plato: believed care of the soul was the most important value, he wants people to do things that impact their lives, everything in nature has a purpose
Aristotle: thinks we need to habituate ourselves to good
justice theory
fair treatment and due reward in accordance with ethical or legal standards including the disposition to deal with perceived injustices of others
John Rawls**
distributive justice
based on the evaluation of the outcomes or results of a business relationship
procedural justice
considers the processes and activities that produce a particular outcome
interactional justice
based on relationships between organizational members including the way employees and management treat one another
Kohlbergs model of cognitive moral development (CMD)
people make different decisions in similar ethical situations because they are in different moral development stages
6 stages of of Kohlberg
1. punishment and obedience
2. individual purpose and exchange
3. mutual interpersonal expectations and relationships
4. social system and conscience maintenance
5. prior rights, social contract, utility
6. universal ethical principles
1-2 = pre conventional
3-4 = conventional (majority develop to these stages)
5-6 = post conventional
global business
practice that brings together people from countries with difference cultures, values, laws and ethical standards of their own countries and industries and also be sensitive to those of other cultures
national culture
includes everything in our surrounding made by people - both tangible and intangible
individualism/collective dimension
refers to how self-oriented members of a culture are in their behavior, place high value on individual achievement and self-interest
power/distance dimension
refers to the power inequality between superiors and subordinates
self-reference criterion
unconscious reference to one's own cultural values, experiences and knowledge
cultural relativism
concept that morality cares from one culture to another and that "right" and "wrong" are defined differently
risk compartmentalization
occurs when profit centers within corporations are unaware of the overall consequences of their actions on the firm as a whole
global common values
shared across most cultures, certain values that are broadly accepted
Adam Smith
founder of capitalism/free economy, wrote "Wealth of Nations", theory of moral sentiments
laissez-faire
also called "invisible hand", it assumes that market through its own inherent mechanisms keeps commerce in equilibrium
John Maynard Keynes
believed that government had role to use power to stimulate portion of the economy
socialism
refers to economic theories advocating the creation of a society when wealth and power are shared and distributed evenly based on the amount of work expended in production
Karl Marx: questioned why capitalist got majority of profits, means on production should be shared by society and profits should be shared equally
social democracy
allows private ownership of property and also features a large government equipped to offer such services as education and health care to its citizens
bimodal wealth distribution
occurs when the middle class shrinks resulting in highly concentrated wealth among the rich and increased numbers of poor people with few resources
rational economics
based on the assumption that people are predictable and will maximize the utility of their choices to their needs and wants
behavioral economics
assumes humans act irrationally because of genetics, emotions, learned behavior and heuristics or rules or thumb
multinational corporations
public companies that operate on a global scale without significant ties to any one nation or region, represent the highest level of international business commitment and are characterized by a global strategy focusing on opportunities throughout the world
business for social responsibility
tracks emerging issues and turned, provides info on corporate leadership and develops practical business tools
international monetary fund
makes short-term loans to member countries with deficits and provides foreign currencies for its members
united nations global impact
a set of 10 principles that promote human rights, sustainability and the eradication of corruption
world trade organization
has 161 members and observer nations, addresses economic and social issues involving agriculture, textiles and clothing, etc., provides legally binding ground rules for international commerce and trade policy
dumping
practice of charging high prices for products in domestic markets while selling the same products in foreign markets at a low price, often at below cost
vertical system
...
human rights
an inherent dignity with equal inalienable rights and the foundation of freedom, justice, and peace in the world
consumerism
the belief that the interests of consumers rather than those of producers should dictate the economic structure of society, refers to the theory that consumption of goods at an ever-increasing rate is economically desirable
made-to-break
planned obsolescence
1960's
JFK's Consumer Bill of Rights (right to be heard, choose, safety and be informed), emergence of consumer protection groups
1970's
professors and philosophers involved, social responsibility emerged with businesses, anti-social responsibility made my Milton Friedman, conferences and development of business ethics centers
1980's
consolidation of concept of business ethics, ethics committees formed to settle conflicts (healthcare), major event: Defense Industry Initiatives (DII)
1990's
institutionalization of business ethics, de-regulation and self-regulation was challenged by industries, FSGO was formed (set up compliance attitude in business, received a lighter sentence if your company committed a white collar crime and you had a code of ethics
2000's
Sarbanes Oxley (2002): mandated code of ethics for companies over a certain size, Dodd-Frank (2009)
what are the advantages of focusing on business ethics?
employee commitment, increased investor loyalty, increased customer satisfaction, contributor profits
Peter Singer
thinks its morally wrong to blow $ on things we don't need, give away what we don't need, cognitive ability: capacity to feel pain
what is the test of any good theory?
see how it stands up against counter argument
Piaget
"structuralism" - task of modernity
4 decision making steps
1. identify dilemma
2. identify alternatives for dealing with issue
3. evaluate alternatives from a moral point of view
4. develop a resolution or argument for why x,y or z is the best option for the situation
Gert Hofstede
1. individualism/collectivism
2. power distance
3. uncertainty avoidance
4. masculinity/feminity
5. long term/short term thinking
major players in global markets?
multinational corporations, United Nations, international monetary fund, world trade organization
J.M. Keynes
believed that government had role to use power to stimulate portion of the economy (believed humans are utilitarian thinkers)
Milton Friedman
thought market should be self-regulated (believed humans are utilitarian thinkers)
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