Terminology Midterm Study Guide

Ethics

How people try to live according to standards of right and wrong.

Society

A structured community connected by similar traditions and customs.

Culture

A group’s shared attitudes, beliefs, and practices.

Moral standards

Principles people use to judge good and bad behavior.

Morals and values

Personal principles you aim to live by. A value system organizes those principles into a code of behavior.

Intrinsic value

Something worth pursuing for its own sake. You value honesty because being honest matters to you.

Instrumental value

Something worth pursuing because it helps you achieve another goal. Money can pay for housing or education.

Value conflict

Pressure to act against a principle you care about. A coworker asks you to lie to close a sale.

Ethical dilemma

A right-versus-right decision. You may need to give up one valid option or compromise a principle to honor another.

Ethical reasoning

Using the available information and your ethical standards to decide what you ought to do.

Sleep-test ethics

Using intuition or feelings to judge a decision. Would you feel comfortable with the choice afterward?

Simple truth

means doing what most people recognize as the right thing.

Personal integrity

is judged through observable behavior. That’s what the quiz means by an external viewpoint.

Rules for individual behavior

guide what a person should do.

Rules for community behavior

guide what is appropriate within a group or society.

Virtue ethics

Character and commitment to a clear ideal. What would an honest or compassionate person do?

Utilitarianism

Consequences. Which option creates the greatest good for the greatest number?

Universal ethics

Duty to moral principles that apply to everyone, everywhere.

Ethical relativism

Traditions, personal views, and the circumstances of the situation shape what counts as right.

Golden Rule

Treat others as you would want to be treated.

Business ethics

Applying general standards of moral behavior to business situations.

Descriptive perspective

Reports what is happening. “The company omitted the sponsorship disclosure.”

Normative (prescriptive) perspective

Recommends what should happen. “The company should disclose the sponsorship.”

Stakeholder

Anyone with a share or interest in the business. In GeoTransmit’s bankruptcy, investors could lose stock value, employees could lose jobs, and creditors could go unpaid.

Corporate governance

The system of rules, practices, and processes that directs and controls the company.

Code of ethics

Written ethical standards that clarify a company’s mission, values, and principles. Internally it guides and empowers employees. Externally it signals commitment to stakeholders.

Ethics Resource Center (ERC)

The organization the quiz credits with calling a code of ethics a central guide for day-to-day workplace decisions.

Business ethics as an oxymoron

The claim that profit-seeking and ethical conduct are incompatible. The slides connect major scandals to greater demand for oversight and commitment to ethical conduct.

Corporate culture of trust

An environment where employees can raise concerns and expect them to be taken seriously. The quiz identifies it as one way to reduce unethical behavior.

Corporate ethics

Human resources → organizational mainstream

CSR

Abstract debate → core performance-assessment issue with legal liabilities

Employee voice

Employees became more comfortable speaking up about irresponsible actions

Codes of ethics

Cosmetic PR documents → performance-measurement documents. Adoption and sharing with stakeholders increased.

Ends-based

What produces the greatest good for the greatest number?

Rules-based

What if everyone made the same decision?

Golden Rule

How would I want to be treated in their position?

Organizational ethics

How ethical standards apply to decisions and behavior across a company’s departments.

Organizational culture

The shared way an organization operates. The quiz emphasizes the combined policies and procedures of its different departments.

Value chain

The activities that turn inputs into a product or service and deliver it to customers.

Primary activities

Activities directly involved in producing, selling, delivering, or servicing the offering. Quiz examples include supply chain management, operations, sales and marketing, distribution, and customer service.

Support activities

Activities that help primary activities operate. Quiz examples include general administration, HR management, and systems development.

Ethical transgression

A violation of an ethical standard. Bribing someone to change a contract date after missing a deadline is the quiz example.

Conflict of interest

Competing interests or obligations that can pull a decision in different directions. The factory relocation question pits business goals against the effects on employees and the community.

GAAP

Generally accepted accounting principles, the standards the quiz identifies as governing the accounting profession.

Sales and marketing

Connects customers’ needs with products or services and helps get those products to satisfied customers. The American Marketing Association (AMA) ethics clues are do no harm, foster trust, and maintain integrity.

Research and development (R&D)

Develops new or improved offerings and supports the organization’s future growth.

Human resources (HR)

Documents periodic performance reviews and disciplinary issues, arranges remedial training when needed, and conducts exit interviews. HR touches the code of ethics through training, evaluation, and consistent handling of misconduct.

Accounting

Records money coming in and going out and balances the accounts.

Internal auditing

Reviews records, processes, and controls. The quiz highlights auditors’ commitment to developing their professional skills.

Corporate social responsibility (CSR)

Business practices that contribute to society beyond earning profits and meeting legal obligations. A clean-fuel employee shuttle is the quiz example.

Corporate citizenship

Another term for CSR.

Corporate conscience

Actions aimed at social benefit beyond maximizing shareholder profit and meeting legal obligations.

Instrumental approach to CSR

Treats shareholder profit maximization as the corporation’s central obligation. An initiative fits when the scenario emphasizes higher productivity or profit as the reason for it.

Milton Friedman

The quiz’s main advocate for the instrumental approach. Managers have an obligation to fulfill their employer’s expectations and pursue returns within the rules.

Social contract approach

A corporation has responsibilities to society because it operates within, benefits from, and affects society. The quiz connects this idea to Henry Ford II, who recognized that companies do not operate in isolation.

Doing well by doing good

A social or environmental initiative can also help the company succeed, for example by reducing waste costs or earning customer trust.

Strategic CSR

Philanthropy selected to earn goodwill or positive publicity. It can be seen as self-serving.

Altruistic CSR

Using company resources to help the community, such as donating money or volunteer time to disaster relief.

Bottom line

The financial result left after expenses are paid from revenue.

Triple bottom line

Measures people, planet, and profit. The quiz combines charitable donations, lower toxic emissions, and higher revenue.

Carbon neutral

Balancing the greenhouse gases produced within a stated scope with equivalent reductions or removals.

Carbon offset

A credit used to compensate for emissions through a reduction or removal elsewhere. It can fund reductions when cutting emissions is difficult. Its value depends on whether the reduction is real, additional, and counted once.