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Ethics
Chapter questions
| Question | Answer |
|---|---|
| How has business ethics developed over time? | prior to 1960 questioned capitalism; 1930's the New Deal; 1950's The Fair Deal by President Harry Truman-civil rights and environmental responsibility; 1970s Ethics as an Emerging Field; 1980s DII; 1990s FSGO; 2000s Sarbanes-Oxley Act |
| What is involved in developing an ethical culture in an organization? | absence of abusive behavior, safe work environment, competitive salaries, fulfillment of all contractual obligations toward employees. |
| What are three benefits to business of a clear ethical framework? | employee commitment and trust; investor loyalty and trust; customer satisfaction and trust (all equal profits) |
| What are various stakeholder roles in business ethics? | stakeholders: customers, investors and shareholders, employees, suppliers, government agencies, communities,a nd many other who have a "stake" or claim in same aspect of a company's products, operations, markets, industry and outcomes. |
| What is an accepted definition of social responsibility? | organization's obligation to maximize its positive impact on stakeholders and to minimize its negative impact |
| Describe relationships between stakeholder orientation and social responsibility. | stakeholder orientation: the degree to which a firm understands stakeholers' concerns. |
| What should be the role of corporate governance in structuring ethics and social responsibility in business? | x |
| List the steps involved in implementing a stakeholder perspective in social responsibility and business ethics. | organization wide distribution of data bout stakeholder groups; distribution of this information, organization's response as a whole. |
| Describe ethical issues in the context of organizational ethics. | x |
| How do ethical issues relate to basic values of honesty, fairness, and integrity? | x |
| Delineate and identify unethical behaviors as business ethics issues. | x |
| What are three challenges of determining an ethical issue in business? | x |
| What is ethics auditing and how is it performed? | x |
| What are the benefits and limitations of ethics auditing? | x |
| What are the challenges of measuring nonfinancial performance in an organization? | x |
| What are the stages of an ethics auditing process? | x |
| What is the strategic role that the ethics audit can play? | x |
| Business ethics focuses mostly on personal ethical issues? | No. Business ethics focuses on organizational concerns (legal and ethical - employees, customers, suppliers, society). |
| Business ethics deals with right or wrong behavior within a particular organization? | Yes. That stems from the basic definition. |
| The 1990s could be characterized as the period when ethics programs were greatly influenced by government legislation. | Yes, the impact of the FSGO means that the 1990s are seen as the period in which business ethics were institutionalized. |
| The trend is away from cultural or ethically based initiatives to legal initiatives in organizations. | No. Many businesses are communicating their core values to their employees by creating ethics programs and appointing ethics officers to oversee them. |
| Social responsibility in business refers to maximizing the visibility of social involvement. | No. Social responsibility refers to an organization's obligation to maximize its positive impact on society and minimize the negative impact. |
| Stakeholders provide resources that are more or less critical to a firm's long-term success | Yes. These resources are both tangible and intangible. |
| Three primary stakeholders are customers, special-interest groups, and the media. | No. Although customers are primary stakeholders, special-interest gropus are usually considered secondary stakeholders. |
| The most significant influence on ethical behavior in the organization is the opportunity to engage in unethical behavior. | No. Ignorant others have more impact on ethical decisions within the organization. |
| The stakeholder perspective is useful in managing social responsibility and business ethics. | Yes. The six steps to implement the approach were provided in this chapter. |
| Business can be considered a game people play like backetball or boxing? | No. People are not economically self-sufficient and cannot withdraw from the game of business. |
| Key ethical issues in an organization relate to fraud, discrimination, honesty and fairness, conflicts of interest and technology | Yes. Figure 3-2 indicates observed misconduct by employees. |
| Fraud occurs when a false impression exists, which conceals facts. | No. Fraud must be purposeful, rather than accidental, and exists when deception and manipulation of facts are concealed to create a false impression that causes harm. |
| The most observed form of misconduct is fraud. | No. The most observed form of misconduct in Table 3-1 is abuse or intimidating behaviour toward employees. |
| business ethics | principals and standards that guide behavior in the world of business |
| Consumers' Bill of Rights | Four basic consumer rights: right to safety, right to be informed, right to choose, right to be heard. |
| social responsibility | an organization's obligation to maximize its positive impact on stakeholders and to minimize its negative impact. |
| Defense Industry Initiative on Business Ethics and COnduct | 1980s 1, supports codes of conduct; 2 ethics training for employees; 3 create atmosphere so can report violations without fear; 4 extensive internal audits/internal reporitng; 5 members preserve the integrity of DII; 6 philosophy of public accountability |
| Federal Sentencing Guidelines for Organizations FSGO | 1991 carrot and stick approach - mitigate penalities for businesses that strive to root out misconduct and establish high ethical and legal standards |
| Sarbanes-Oxley Act | passed in 2002 - made securities fraud a criminal offense and stifened penalties for corporate fraud. |
| ethical culture | character or decision making process that employees use to determine whether their responses to ethical issues are right or wrong |
| honesty | to tell the truth to the best of your knowledge and not to hide anything |
| fairness | quality of being just, equitable and impartial |
| equality | relates to how wealth is distributed between employees, within a company or a country, or globally |
| reciprocity | return of small favors that are approximately equal in value |
| optimization | making something as perfect or effective as possible |
| integrity | a person's character and made up of two parts: a formal relation that one has to oneself and a person's set of terminal or enduring values from which he or she does not deviate. |
| ethical issue | problem, situation or opportunitu that requires an individual, etc., to choose among several actions that must be evaluated as right or wrong, ethical or unethical |
| ethical dilemma | has no right or ethical choice |
| abusive/intimidating behavior | x |
| lying | x |
| conflict of interest | x |
| bribery | practice of offering something (usually money) in order to gain an illicit advantage. |
| active bribery | person who gives the bribe |
| passive bribery | person who receives bribe |
| facilitation payment | payment for routine governmental action - not illegal, but is a bribe, blurry line |
| corporate intelligence | collection and analysis of information on markets, technologies, customers and competitors as well as socioeconomic and external political trends |
| hacking | intentionally accessing a computer without authorization |
| system hacking | assumes that the attacker already has access to a low-level, privileged user account. |
| remote hacking | involves attempting to penetrate remotely a system across the internet |
| physical hacking | requires that the CI agent enter a facility personally. |
| social engineering | someone is tricked into revealing valuable corporate information or password |
| shoulder surfing | look over employees shoulder while he or she types the password |
| password guessing | easy social engineering technique. If a person can find out personal things, i.e., child's name, birthday, etc., passwords can be guessed |
| dumpster diving | searching thru trash to find items that might be useful; successful for acquiring trade secrets |
| whacking | wireless hacking. eavesdrop on wireless networks; cell phones |
| phone eavesdropping | a person with a digital recording device can monitor and record a fax line |
| discrimination | race, color, religion, sex, marital status, sexual orientation, public-assistance status, disability, age, national origin, or veteran status. |
| Equal Employment Opportunity Commission | race, color, religion, sex, marital status, sexual orientation, public-assistance |
| Age Discrimination in Employment Act | can discriminate against people between the ages of 49 and 69, as well as those that require employees to retire before age 70 |
| affirmative action program | efforts to recruit, hire, train and promote individuals from groups that have traditionally been discriminated against based on race, gender, or other characteristics |
| sexual harassment | sex discrimination |
| hostile work environment | x |
| dual relationship | x |
| unethical dual relationship | x |
| environmental issue | negative aspect of human activity on the biophysical environment. |
| Kyoto Protocol | international agreement to reduce greenhouse gases |
| water pollution | addition of harmful chemicals to rivers and lakes |
| fraud | any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression |
| accounting fraud | deliberate and improper manipulation of sales revenue and/or expenses to make the company look better than it is |
| marketing fraud | ad must be truthful and not misleading |
| puffery | undue or exaggerated praise |
| implied falsity | a claim that is literally true or ambiguous, but conveys a message that is false |
| literally false | a lie |
| labeling issue | x |
| slamming | the switching of a customers long-distance telephone company or other public utility without authorization |
| consumer fraud | when consumers attempt to deceive businesses for their own gain. |
| insider trading | An insider is someone who owns 10% or more of company; illegal is buying or selling of stocks by insiders who possess material that is still not public; legal is buying and selling stock in an insider's own company, but not all the time |
| intellectual property right | the legal protection of intellectual properties such as music, books and movies |
| privacy issue | monitoring of employees' use of available technology and consumer privacy. |
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