BUS 345 Final Exam Vocab
Terms in this set (70)
- Misconduct Observed
- Reporting Bad Behavior
- Retaliation against workers
- Pressure to Compromise
- Weak Ethical Cultures
Bottom line mentality
• When an individual goes to work for an organization, a socialization takes place in which the individual comes to learn and adopt the predominant values of that organization. To survive an succeed, certain norms must be internalized, honored, and perpetuated. Several of these "internal;" norms are prevalent on business organizations include:
- Respect for authority and culture
- Loyalty to bosses and the organization
- Conformity to principles, practices, and traditions
- Performance counts above all else
- Results count above all else
s concerned with describing, characterizing, and studying the morality of people, an organization, a culture, or a society.
- It also compares and contrasts different moral codes, systems, practices, beliefs, and values.
is concerned with supplying and justifying a coherent moral system of thinking and judging. Normative ethics seeks to uncover, develop, and justify basic moral principles that are intended to guide behavior, actions, and decisions.
as contrasted with her integrity strategy discussed earlier, is more focused on submission to the law as its driving force. The compliance strategy is lawyer driven and is oriented not toward ethics or integrity but toward conformity with existing regulatory and criminal law. The compliance approach uses deterrence as its underlying assumption. This approach envisions managers as rational maximizes of self-interest, responsive to the personal costs and benefits of their choices, yet indifferent to the moral legitimacy of those choices.
Conventional approach to business ethics
based on how common, everyday society (the average person) views business ethics today. The conventional approach is based on ordinary, common sense and prevailing practice.
Conventional level of moral development
The individual learns the importance of conforming to the conventional norms of society.
- This is the level at which social relationships form and become dominant.
What the elements are for moral judgement
(1) moral imagination
(2) moral identification and ordering
(3) moral evaluation
(4) tolerance of moral disagreement and ambiguity
(5) integration of managerial and moral competence
(6) a sense of moral obligation.
Ethical test approach to business ethics
based on short, practical questions or "tests" to guide ethical decision making, behavior, and practices.
is defined as an approach that is devoid of ethical principles or precepts and at the same time implies a positive and active opposition to what is ethical. ____________________________________ decisions, behaviors, actions, and practices are discordant with ethical principles.
is characterized by a conception of ethics as the driving force of an organization. Ethical values shape management's search for opportunities, the design of organizational systems, and the decision-making process.
Intentional amoral management
managers of this type do not factor ethical considerations into their decisions, actions, and behaviors because they believe business activity resides outside the sphere to which moral judgments apply. They simply think that different rules apply in business than in other realms of life.
Concept of morality
is a doctrine or system of moral conduct. Moral conduct refers to principles of right, wrong, and fairness in behavior. For the most part, then, we can think of ethics and morality as being so similar to one another that we may use the terms interchangeably to refer to the study of fairness, justice, and moral behavior in business.
onforms to the highest standards of ethical behavior or professional standards of conduct. Although it is not always crystal clear what level of ethical standards prevail, __________________________ strives to be highly ethical in terms of its focus on elevated ethical norms and professional standards of conduct, motives, goals, orientation toward the law, and general operating strategy.
is concerned with supplying and justifying a coherent moral system of thinking and judging. ______________________seeks to uncover, develop, and justify basic moral principles that are intended to guide behavior, actions, and decisions.
Principles approach to business ethics
ased on the use of ethics principles or guidelines to justify and direct behavior, actions, policies, and practices.
Unintentional Amoral management
do not think about business activity in ethical terms, but for different reasons. These managers are simply casual about, careless about, or inattentive to the fact that their decisions and actions may have negative or deleterious effects on others. These managers lack ethical perception and moral awareness. They have no "moral sense."
Codes of conduct and Codes of Ethics
The most formal way by which companies and ethics officers have fulfilled this responsibility
is the single most important element of your ethics and compliance program. It sets the tone and direction for the entire function. Often, the Code is a standalone document, ideally only a few pages in length. It introduces the concept of ethics and compliance and provides an overview of what you mean when you talk about ethical business conduct.
is more rule bound and legalistic
lawyer driven and is oriented not toward ethics or integrity but toward conformity with existing regulatory and criminal law.
conforming to a rule, such as a specification, policy, standard or law.
Core ethical values
The existence of a set of _______________________ infused throughout the organization by way of policies, processes and practices
refers to a quality, characteristic, or state in which activities, processes, practices, and decisions that take place in companies become open or visible to the outside world. A common definition of transparency is the degree to which an organization:
- Provides public access to information
- Accepts responsibility for its actions
- Makes decisions more openly
- Establishes incentives for leaders to uphold these standards
refers to ethics ortentation
Fraud risk assessments
are review processes designed to identify and monitor conditions and events that may have some bearing on the company's exposure to compliance/misconduct risk and to review company's methods for dealing with these concerns. Risk in this context typically refers to the company's exposure to possible compliance, misconduct, and ethics issues.
merits consideration because of its history and popularity as a basic and strong principle of ethical living and decision making. A number of studies have found it to be the most powerful and useful to managers. The Golden Rule—"Do unto others as you would have them do unto you"—is a straightforward, easy-to-understand principle.
According to Maxwell, there are four reasons why managers and all decision makers should adopt the Golden Rule.
1. The Golden Rule is accepted by most people.
2. The Golden Rule is easy to understand.
3. The Golden Rule is a win-win philosophy.
4. The Golden Rule acts as a compass when you need direction.
are important, justifiable claims or entitlements. They do not depend on a legal system to be valid. They are rights that people ought to have based on moral reasoning. The right to life or the right not to be killed by others is a justifiable claim in our society. The Declaration of Independence referred to the rights to life, liberty, and the pursuit of happiness.
The opposite of transparency is ____________, or an opaque condition in which activities and practices remain obscure or hidden from outside scrutiny and review.
Principle of justice
Just as the principle of utilitarianism does not handle well the idea of rights. it involves the fair treatment of each person. This is why it is often called the "fairness principle."
Principle of rights
rights cannot simply be overridden by utility, but only by another, more basic or important right.
Principle of utilitarianism
a consequential principle, or as stated earlier, a teleological principle. In its simplest form, utilitarianism asserts: "We should always act so as to produce the greatest ratio of good to evil for everyone."10 Another way of stating utilitarianism is to say that one should take the course of action that represents the "greatest good for the greatest number."
Looking beyond possible human rights violations in sweatshops, claims that companies may have violated the human rights of foreign nationals could come back to haunt firms that have been accused of more serious human rights abuses. What is at stake is the U.S. courts' inter- pretation of an obscure piece of legislation known as the Alien Tort Claims Act (ATCA). Though researchers cannot determine why Congress passed this little-known act in 1789, recently it has been the centerpiece of a controversy that may have wide- spread implications for American firms operating abroad.
Corruption in global business continues to be the overarching problem. It starts with outright bribery of government officials and the giving of questionable political contribu- tions. Beyond these, there are many other corrupt activities: the misuse of company assets for political favors, kickbacks and protection money for police, free junkets for government officials, secret price-fixing agreements, and insider dealing, just to mention a few.
This position is characterized by foreign direct investors such as MNCs following the host country's ethical standards. This is the posture reflected in the well-known saying, "When in Rome, do as the Romans do."
This position holds that the MNC should continue to follow its home country's ethical standards even while operating in another country. Because U.S. and Western standards for treating employees, consumers, and the natural environment are quite high relative to the standards in many LDCs, it is easy to see how managers might find this posture appealing.
FLA (Fair Labor Association)
a nonprofit organization of clothing firms, unions, and human rights groups focused on the worldwide elimination of sweatshops.
Foreign corruption practices act
One of the first initiatives by a major government to address the problem of corruption and bribery in international business was the passage of
or minor, facilitating payments to officials, for the primary purpose of getting them to do whatever they are supposed to do anyway. Such payments are commonplace in many countries.
LDC (Less Developed countries)
the opportunities for business exploi- tation and the engagement in questionable practices (by developed countries' standards) are abundant.
MNC (Multi-national corporations)
Firms face two major underlying challenges as they operate in a multinational environment. One challenge is that of achieving corporate legitimacy as the ____________________________, seeks to be recognized and accepted in an unfamiliar society.
the practice of basing some of a company's processes or services overseas, so as to take advantage of lower costs.
obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source.
Social accountability group (Social Accountability International (SAI))
SAI is a non- governmental, multi-stakeholder organization whose mission is to advance the human rights of workers around the world. SAI had developed one of the world's preeminent social standards
characterized by child labor, low pay, poor working conditions, worker exploitation, and health and safety violations—have existed for decades, they have grown in number in the past couple decades as global competition has heated up and corporations have sought to lower their costs and increase their productivity.
Government influences business through regulation, taxation, and other forms of persuasion that we will consider in more detail in the next section. Business, likewise, has its approaches to influencing government, which we will deal with in Chapter 12. Lobbying, in one form or another, is business's primary means of influencing government.
Quite frequently, trends and countertrends overlap with one another. Such is the case with regulation and its counterpart, ________________. From an economic perspective, a continual striving for the balance of freedom and control for business will be best for society. From a political perspective, there is an ongoing interplay of different societal goals and means for achieving those goals. The outcome is a mix of economic and political decisions that seem to be in a constant state of flux. Thus, in the economy at any point in time, trends that appear counter to one another can coexist. These trends are the natural result of competing forces seeking some sort of balance or equilibrium
are most visible when we look at the number of new agencies created, aggregate expenditures, and growth patterns of the budgets of federal agencies responsible for regulation.
This type of regulation is best exemplified by old-line regulatory bodies such as the Interstate Commerce Commission (ICC), which was created in 1887 by Congress to regulate the railroad industry; the Civil Aeronautics Board (CAB), which was created in 1940 to regulate the airline industry; and the Federal Communications Commission (FCC), which was established in 1934 to consolidate federal regulation of interstate communications and, later, the radio, telephone, and telegraph.
The basic idea behind this rationale is that ______________________________ will lead to prices being set at unprofitably low levels. This action will force firms out of business and ultimately will result in products that are too costly because the remaining firm will raise its prices to excessive levels, leaving the public worse off than before.
by transferring income for the purposes of economic fairness. For example, one observer recently suggested that U.S. defense contractors should pay _________________tax for the money they made during the wars in Iraq and Afghanistan.
of airport security (the return of airport security to the government sector) following the attack on the World Trade Center. Several cities are now considering taking their electric business back from private utilities in order to deal with climate change and power disruptions.
is "every form of state intervention that affects industry as a distinct part of the economy."2
(failure of the free enterprise system) has occurred and government, intending to represent the public interest, has chosen to take corrective action.
exists in a market where the economies of scale are so great that the largest firm has the lowest costs and thus is able to drive out its competitors.
(or spillover effects) that result when the manufacture or use of a product gives rise to unplanned or unintended side effects on third parties (the producer and the consumer are first and second parties).
generally speaking, refers to the process of changing a public organization to private control or ownership.55 The intent is to capture both the discipline of the free market and a spirit of entrepreneurial risk-taking.56 To understand privatization, we need to differentiate two functions government might perform: (1) producing a service and (2) providing a service.
a rule or directive made and maintained by an authority.
because they are absorbed by society rather than incorporated into the cost of making the product.
government not only employs regulations to address market failures and negative externalities, but it also seeks to use regulations to help achieve certain ___________________ it deems to be in the public interest.
because it focuses on the furtherance of societal objectives rather than on markets and economic variables. While economic regulation focuses on markets, social regulation focuses on business's impacts on people.
is the process of influencing public officials to promote or secure the passage or defeat of legislation. __________________ are intensely self-interested. Their goals are to promote legislation that is in their organizations' interests and to defeat legislation that runs counter to that. Business interests, labor interests, ethnic and racial groups, professional organizations, and those simply pursuing ideological goals they believe to be in the pub- lic interest are lobbying at the federal, state, and local levels. Our focus is on business lobbying at the federal level, although we must remember that this process also occurs daily at the state and local levels.
________________ has been defined as the professionalization of the art of persuasion.
refer to the political contributions from undisclosed donors.
Golden rule of politics
sums up the concerns of those who argue against corporate political spending: "He who has the gold, rules."
refers to the process of mobilizing the "grassroots"—individual citizens who might be most directly affected by legislative activity—to political action. An estimated 40 percent of Fortune 500 companies use ______________ consultants.
formed by political leaders to support other candidates for office
is an assumption of responsibility for political actions and a willingness to be answerable for them.
Political action committee (PAC)
are committees organized to raise and spend money for political candidates, ballot initiatives, and proposed legislation.
is broadly defined as participation in the formulation and execution of public policy at various levels of government. As decisions about the current and future shape of society and the role of the private sector shift from the marketplace to the political arena, corporations, like all interest groups, find it imperative to increase their political involvement and activity.
also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific industry. ... Many associations are non-profit organizations governed by bylaws and directed by officers who are also members.
has become a major issue because much corporate political activity today is outside the public view.
Umbrella trade associations
which represent the collective business interests of the United States. The best examples of umbrella trade associations are the Chamber of Commerce of the United States and the National Association of Manufacturers (NAM)