Chapter 3: Business Ethics

Vocabulary flashcards covering core concepts of business ethics, social responsibility, legal-ethical matrices, stakeholder obligations, and corporate governance based on the lecture notes.

Ethics

A set of beliefs about right/good & wrong/bad.

Business ethics

The application of right/good & wrong/bad in a business setting.

Ethical dilemmas

Decisions that involve a conflict of values where every potential course of action has some significant negative consequences.

Legal-Ethical Matrix

A framework illustrating examples of business decisions categorized by legality and morality, including legal and ethical, legal and unethical, illegal and unethical, and illegal and ethical.

Code of ethics

A formal written document that defines the ethical standards and gives information to make ethical decisions across a range of situations.

Whistle-blowers

Employees who report their employer's illegal or unethical behavior to authorities or media.

Spectrum of Social Responsibility

A continuum ranging from less responsible (no contribution) to responsive contributions, to more responsible (proactive contributions integrated into strategic plans).

Stakeholders

Groups that have a stake in the performance and actions of an organization.

Consumerism

A social movement for consumer rights, including the right to be safe, the right to be informed, the right to choose, and the right to be heard.

Planned obsolescence

Deliberately designing products to fail in order to shorten the time between consumer purchases.

Sarbanes-Oxley Act

Legislation that sets higher ethical standards for public corporations and accounting firms by limiting conflict-of-interest issues and requiring financial officers and CEOs to certify financial statements.

Corporate philanthropy

Business donations to nonprofit groups.

Cause-related marketing

Marketing partnerships between businesses and nonprofit organizations where businesses give money to a nonprofit for each product sold.

Corporate responsibility

Business contributions to the community through the actions of the business itself rather than donations of money and time.

Sustainable development

Doing business to meet the needs of the current generation without harming the ability of future generations to meet their needs.

Green marketing

Developing and promoting environmentally sound products and practices to gain a competitive edge.

Foreign Corrupt Practices Act (1977)

A law under which bribes are illegal for companies and individuals.

Social audit

An evaluation of how well a firm is meeting its ethics and social responsibility goals, measured by traditional financial indicators and social-responsibility indicators.