Ethics Midterm

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  1. business ethics
    comprises organizational principles, vals, and norms that originate from individuals, organizational statements, or legal system that primarily guide individual and group behavior in business
  2. morals
    person's personal philosophies about what's right/wrong
  3. vals
    enduring beliefs and ideals that're socially enforced (ex teamwork, integrity, trust)
  4. principles
    specific an pervasive boundaries for behavior that shouldn't be violated; basis for rules
  5. Consumers' Bill of Rights
    1962- JFK outlined 4 basic consumer rights: right to safety, right to be informed, right to choose, right to be heard
  6. corporate social responsibility
    org's obligation to maximize its positive impact on stakeholders and minimize negative impact
  7. Defense industry initiative on bus ethics and conduct (DII)
    1980s- developed to guide corporate support for ethical conduct; 6 principles: codes of conduct & distribution, ethics training and continuous support, open atmosphere where employees can report violations, internal audits and internal reporting, integrity of defense industry, adopt philosophy of public accountability
  8. Fed Sentencing Guidelines for Orgs (FSGO)
    Nov 1991, set tone for orgtl ethical compliance programs; based on 6 DII principles; codified incentives to rewards orgs for taking action to prevent misconduct
  9. SOX
    2002- most far-reaching change in orgtl control and acc regulations since Securities and Exchange Act of '64; created PCAOB requiring corps establish code of ethics and maintain transparency in fin reporting, made securities fraud a criminal offense and stiffened corporate fraud penalties
  10. Dodd-Frank Wall Street Reform and Consumer Protection Act
    addressed issues related to fin crisis and recession; most sweeping fin legislation since SOX; reqd regulators to create rules to promote fin stability, improve accountability and transparency, and protect consumers from abusive fin practices
  11. ethical culture
    component of corporate culture that captures vals and norms org defines and is compared to by industry as good conduct
  12. stakeholder
    anyone who has stake or claim in some aspect of comp's products, ops, mrkt, industry, and outcomes
  13. primary stakeholders
    those whose continued association is necessary for firm's survival (customers, suppliers, employees, investors, shareholders, govs, communities)
  14. secondary stakeholders
    don't engage in transactions w/ comp an aren't essential to survival (media, special interest groups, trade associations)
  15. stakeholder interaction model
    reciprocal relations bet firm and host of stakeholders
  16. stakeholder orientation
    degree to which firm understands and addresses stakeholder demands; 3 activities: generation of data about stakeholder groups and assessment of firm's effects on them, distribution of info through firm, and responsiveness of org to info
  17. corporate citizenship
    extent to which businesses strategically meet economic, legal, ethical, and philanthropic responsibilities placed on them by stakeholders
  18. reputation
    one of org's greatest intangible assets w/ tangible val
  19. corporate governance
    4th major issue in social responsibility; involves development of formal systems of accountability, oversight, and control
  20. shareholder model of corp governance
    founded in classic economic precepts, including goal of maximizing investor wealth; highly criticized
  21. stakeholder model of corp governance
    broader view of purpose of bus; entails creative corp governance systems that consider stakeholder welfare in tandem w/ corp needs and interests
  22. interlocking directorate
    BOD members being linked to more than one comp
  23. exec compensation
    one of biggest issues BODs face; most boards spend more time deciding how much to compensate than ensuring comp's fin reporting system integrity
  24. implementing stakeholder perspective
    • 1. assessing corp culture
    • 2. identifying stakeholder groups
    • 3. identifying stakeholder issues
    • 4. assessing orgtl commitment to social responsibility
    • 5. identifying resources and determining urgency
    • 6. gaining stakeholder feedback
  25. integrity
    one of more important oft-cited elements of virtue; refers to being whole, sound, and in unimpaired condition; foundational val for managers to build internal orgtnl culture of trust
  26. honesty
  27. fairness
    quality of being just, equitable and impartial; 3 elements (equality, reciprocity, optimization)
  28. equality
    distribution of benefits and resources
  29. reciprocity
    interchange of giving and receiving in social relationships; occurs when action that has effect upon other is reciprocated w/ action that has approx equal effect
  30. optimization
    tradeoff bet equity (equality) and efficiency (max productivity)
  31. ethical issue
    prob, situation, or opportunity that reqs indiv, group, or org to choose among several actions that must be eval'd as right/wrong
  32. ethical dilemma
    prob, situation, or opportunity that res indiv, group, or org to choose among several actions that all have negative outcomes (NO ETHICAL CHOICE)
  33. abusive/intimidating behavior
    physical threats, false accusations, annoying, profanity, yelling, insults, ignoring, harshness, unreasonableness; meanings differ from person to person
  34. lying
    distorting truth; commission lying = creating belief by words that intentionally deceive receiver; omission lying = intentionally not informing others of any diffs, probs, warnings, or negative issues related to comp/product
  35. conflicts of interest
    exist when indiv must choose whether to advance his own interests, those of org, or those of other group;
  36. bribery
    practice of offering something in order to gain illicit advantage from someone in authority
  37. active bribery
    person who promises/gives bribe commits offense
  38. passive bribery
    person receiving bribe commits offense
  39. facilitation pmts
    NOT bribery; made to obtain/retain bus/ other improper advantages
  40. corporate intelligence
    collection and analysis of info on mrkts, techs, competitors, and customers, socioeconomic/external political trends
  41. hacking
    one of top 3 methods of obtaining trade secrets; 3 categories: system (attacker already has access to low-lvl, privileged-user acct), remote (remotely penetrating system across Internet), physical (reqs CI agent enter facility personally)
  42. social engineering
    tricking of indivs into revealing passwords/other corp info
  43. shoulder surfing
    looking over shoulders to see passwords
  44. password guessing
    guessing password
  45. dumpster diving
    looking through trash; once trash is in public street it's fair game
  46. whacking
    wireless hacking
  47. discrimination
    illegal in US ; when it's in terms of political opinions or union affiliations it's harrassment
  48. Age Discrimination in Employment Act
    outlaws hiring practices that discriminate against ppl 40+ and those that req employees retire before 70
  49. affirmative action programs
    efforts to recruit, hire, train, and promote qualified indivs from groups that have traditionally been discriminated against (minorities)
  50. sexual harrassment
    repeated, unwanted behavior of sexual nature; verbal, visual, written, physical
  51. hostile work environ
    3 criteria: conduct was unwelcome, conduct was severe, pervasive, or so hostile as regarded by claiming as to alter his condition of employment, and conduct would be considered hostile/offensive by reasonable person; decisive issue is whether act interfered w/ work performance
  52. dual relationship
    personal, loving, or sexual relationship w/ someone w/ whom you share professional responsibilities
  53. unethical dual relationship
    relationship could cause direct/indirect conflict of interest/risk of impairment to professional judgment; intent = important factor
  54. fraud
    purposeful communication that deceives, manipulates, or conceals facts in order to harm others
  55. acc fraud
    involves corp's fin reports, where comps provide important info on which others base decisions involving millions of dollars
  56. mrktg fraud
    dishonestly creating, distributing, promoting, and pricing products
  57. puffery
    exaggerated advertising, blustering, boasting upon which no reasonable buyer would rely; isn't actionable
  58. implied falsity
    message has tendency to mislead, confuse, or deceive public
  59. literally false
    tests prove (ad cites study that establishes claim) and bald assertions (a makes claim that can't be sustained)
  60. consumer fraud
    when consumers attempt to deceive business for own gain
  61. inside trading
    • illegal - buying/selling of stocks by insiders who have info not yet public
    • legal - legally buying/selling stock in insider's own comp but not all the time
  62. intellectual property rights
    legal protection of intellectual property (music, movies, books)
  63. privacy issues
    monitoring of employees' use of avail tech and consumer privacy
  64. voluntary practices
    beliefs, vals, and voluntary contractual obligations of bus (ex. philanthropy, giving employees a lot of benefits)
  65. core practices
    documented best practices, often encouraged by legal and regulatory forces; highly appropriate and common practice that helps ensure compliance w legal reqs, industry self regulation, and societal expectations
  66. better business bureau
    leading self regulatory body that provides direction for managing customer disputes and reviews advertising cases
  67. mandated boundaries
    externally imposed boundaries of conduct like laws, rules, regulations, etc
  68. civil law
    defines rights and duties of indivs and orgs (including businesses)
  69. criminal law
    not only prohibits specific actions, but imposes fines/imprisonment as punishment for breaking law
  70. procompetitive legislation
    laws preventing establishment of monopolies, inequitable pricing, or other practices that reduce competition
  71. occupational safety and health administration (OSHA)
    enforces occupational safety and health act of 1970 and makes regular surprise inspections to ensure bus have safe working environs
  72. PCAOB
    monitors acc firms that audit pub comps and establishes stds and rules for auditors in acc firm; given investigatory and disciplinary power over auditors and securities analysts who issue reports about copr governance and health
  73. consumer fin protection bureau (CFPB)
    created by Dodd-Frank Act; indep agency w/in fed reserve system that regulates offering and provision of consumer fin products/services under fed consumer fin laws; curtail unfair lending and credit card practices, check safety of fin products fore mrkt launch, and enforce consumer fin laws
  74. cause-related mrktg
    ties org's products directly to social concern through mrktg program
  75. strategic philanthropy
    synergistic and mutually beneficial use of org's core competencies and resources to deal w/ key stakeholders as to bring about orgtl and societal benefits
  76. ethical awareness
    ability to perceive whether situation/decision has ethical component
  77. ethical issue intensity
    relevance/importance of event/decision in eyes of indiv, work group, or org
  78. moral intensity
    indivs' perceptions of social pressure and harm they believe their decisions will have on others
  79. locus of control
    indiv diffs in relation to belief about how you're affected by internal vs external events; external control = go w/ flow bec things are out of your control; internal control = believe they control events in their lives by own effort and skill; masters of destinies; internals are more ethical
  80. corporate culture
    set of vals norms and artifacts, including ways of solving probs that members of org share
  81. ethical culture
    integrity of decisions made and is funct of many factors
  82. significant others
    those who have influence in work group (peers, managers, subordinates, coworkers)
  83. obedience to authority
    helps explain why many employees resolve bus ethics issues by following superior's instructions
  84. opportunity
    conditions in org that limit/permit ethical/unethical behavior
  85. immediate job context
    opportunity related to this; where ppl work, with whom, nature of work
  86. normative approach
    how orgtl decision makers SHOULD approach issue
  87. moral philosophy
    specific principles or vals ppl use to decide what's right/wrong
Card Set
Ethics Midterm
Terms to know for Business Ethics Midterm
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