01 Chapter 04 Business Ethics and Social Responsibility: Doing Well by Doing Good

Ethics

A set of beliefs about right and wrong, good and bad.

ethical dilemmas

A decision that involves a conflict of values; every potential course of action has some significant negative consequences.

universal ethical standards

Ethical norms that apply to all people across a broad spectrum of situations.

business ethics

The application of right and wrong, good and bad, in a business setting.

code of ethics

A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.

whistle-blowers

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

Planned obsolescence

The strategy of deliberately designing products to fail in order to shorten the time between purchases.

Stakeholders

Any groups that have a stake—or a personal interest—in the performance and actions of an organization.

Consumerism

A social movement that focuses on four key consumer rights: (1) the right to be safe, (2) the right to be informed, (3) the right to choose, and (4) the right to be heard.

Sarbanes-Oxley Act

Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements.

Corporate philanthropy

All business donations to nonprofit groups, including money, products, and employee time.

Carbon footprint

Refers to the amount of harmful greenhouse gases that a firm emits throughout its operations, both directly and indirectly.

Sustainable development

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

Corporate responsibility

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

Cause-related marketing

Marketing partnerships between businesses and nonprofit.

Green marketing

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

Social responsibility

The obligation of a business to contribute to society.

Social audit

A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals.