Ethics Midterm

comprises organizational principles, vals, and norms that originate from individuals, organizational statements, or legal system that primarily guide individual and group behavior in business

person's personal philosophies about what's right/wrong

enduring beliefs and ideals that're socially enforced (ex teamwork, integrity, trust)

specific an pervasive boundaries for behavior that shouldn't be violated; basis for rules

1962- JFK outlined 4 basic consumer rights: right to safety, right to be informed, right to choose, right to be heard

org's obligation to maximize its positive impact on stakeholders and minimize negative impact

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

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

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

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

component of corporate culture that captures vals and norms org defines and is compared to by industry as good conduct

anyone who has stake or claim in some aspect of comp's products, ops, mrkt, industry, and outcomes

those whose continued association is necessary for firm's survival (customers, suppliers, employees, investors, shareholders, govs, communities)

don't engage in transactions w/ comp an aren't essential to survival (media, special interest groups, trade associations)

reciprocal relations bet firm and host of stakeholders

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

extent to which businesses strategically meet economic, legal, ethical, and philanthropic responsibilities placed on them by stakeholders

one of org's greatest intangible assets w/ tangible val

4th major issue in social responsibility; involves development of formal systems of accountability, oversight, and control

founded in classic economic precepts, including goal of maximizing investor wealth; highly criticized

broader view of purpose of bus; entails creative corp governance systems that consider stakeholder welfare in tandem w/ corp needs and interests

BOD members being linked to more than one comp

one of biggest issues BODs face; most boards spend more time deciding how much to compensate than ensuring comp's fin reporting system integrity

• 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

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

truthfulness/trustworthiness

quality of being just, equitable and impartial; 3 elements (equality, reciprocity, optimization)

distribution of benefits and resources

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

tradeoff bet equity (equality) and efficiency (max productivity)

prob, situation, or opportunity that reqs indiv, group, or org to choose among several actions that must be eval'd as right/wrong

prob, situation, or opportunity that res indiv, group, or org to choose among several actions that all have negative outcomes (NO ETHICAL CHOICE)

physical threats, false accusations, annoying, profanity, yelling, insults, ignoring, harshness, unreasonableness; meanings differ from person to person

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

exist when indiv must choose whether to advance his own interests, those of org, or those of other group;

practice of offering something in order to gain illicit advantage from someone in authority

person who promises/gives bribe commits offense

person receiving bribe commits offense

NOT bribery; made to obtain/retain bus/ other improper advantages

collection and analysis of info on mrkts, techs, competitors, and customers, socioeconomic/external political trends

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)

tricking of indivs into revealing passwords/other corp info

looking over shoulders to see passwords

guessing password

looking through trash; once trash is in public street it's fair game

wireless hacking

illegal in US ; when it's in terms of political opinions or union affiliations it's harrassment

outlaws hiring practices that discriminate against ppl 40+ and those that req employees retire before 70

efforts to recruit, hire, train, and promote qualified indivs from groups that have traditionally been discriminated against (minorities)

repeated, unwanted behavior of sexual nature; verbal, visual, written, physical

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

personal, loving, or sexual relationship w/ someone w/ whom you share professional responsibilities

relationship could cause direct/indirect conflict of interest/risk of impairment to professional judgment; intent = important factor

purposeful communication that deceives, manipulates, or conceals facts in order to harm others

involves corp's fin reports, where comps provide important info on which others base decisions involving millions of dollars

dishonestly creating, distributing, promoting, and pricing products

exaggerated advertising, blustering, boasting upon which no reasonable buyer would rely; isn't actionable

message has tendency to mislead, confuse, or deceive public

tests prove (ad cites study that establishes claim) and bald assertions (a makes claim that can't be sustained)

when consumers attempt to deceive business for own gain

• 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

legal protection of intellectual property (music, movies, books)

monitoring of employees' use of avail tech and consumer privacy

beliefs, vals, and voluntary contractual obligations of bus (ex. philanthropy, giving employees a lot of benefits)

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

leading self regulatory body that provides direction for managing customer disputes and reviews advertising cases

externally imposed boundaries of conduct like laws, rules, regulations, etc

defines rights and duties of indivs and orgs (including businesses)

not only prohibits specific actions, but imposes fines/imprisonment as punishment for breaking law

laws preventing establishment of monopolies, inequitable pricing, or other practices that reduce competition

enforces occupational safety and health act of 1970 and makes regular surprise inspections to ensure bus have safe working environs

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

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

ties org's products directly to social concern through mrktg program

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

ability to perceive whether situation/decision has ethical component

relevance/importance of event/decision in eyes of indiv, work group, or org

indivs' perceptions of social pressure and harm they believe their decisions will have on others

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

set of vals norms and artifacts, including ways of solving probs that members of org share

integrity of decisions made and is funct of many factors

those who have influence in work group (peers, managers, subordinates, coworkers)

helps explain why many employees resolve bus ethics issues by following superior's instructions

conditions in org that limit/permit ethical/unethical behavior

opportunity related to this; where ppl work, with whom, nature of work

how orgtl decision makers SHOULD approach issue

specific principles or vals ppl use to decide what's right/wrong