4 Business Ethics and Social Responsibility: Doing Well by Doing Good

A set of practice flashcards covering key concepts, terms, standards, laws, and examples from the lecture notes on ethics and social responsibility.

What is Ethics?

Beliefs about right and wrong.

What is Social Responsibility?

The obligation of a business to contribute to society.

What are Universal Ethical Standards?

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

List the six universal ethical standards.

Trustworthiness; Respect; Responsibility; Fairness; Caring; Citizenship.

In Exhibit 4.1, how is promoting high-calorie/low-nutrient foods with inadequate risk information classified?

Legal and Ethical.

How is Embezzling money classified in the Legal-Ethical Matrix?

Illegal and Unethical.

Who is a whistleblower and what protection do they have?

A person who reports illegal or unethical behavior; protected by the Sarbanes-Oxley Act.

What is a Code of Ethics?

A formal, written document that defines the ethical standards of an organization and guides employees’ decisions.

What are key steps to implementing a code of ethics?

Get executive buy-in; establish expectations at all organizational levels; integrate ethics into mandatory training; ensure global/local scope; build a trusted reporting structure; protect whistle-blowers; enforce the code.

What does the Spectrum of Social Responsibility illustrate?

From No Contribution to More Responsible, with stages: No Contribution, Responsive Contributions, Proactive Contributions, More Responsible.

Define a Stakeholder.

Anyone affected by the company’s decisions.

What are the four Rights of Consumers?

The Right to Be Safe; The Right to Be Informed; The Right to Choose; The Right to be Heard.

What is Planned Obsolescence?

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

What does Sarbanes-Oxley Act require?

Strict reporting requirements; personal sign-off by the CEO and officers; an anonymous red-flag system for reporting unethical/illegal behavior.

Define Corporate Responsibility.

The actions of the business that contribute to the community itself rather than time or money.

Define Corporate Philanthropy.

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

Define Cause-related Marketing.

Marketing partnerships between business & nonprofits designed to spike sales and raise money.

What is Sustainable Development?

Doing business to meet the needs of the present generation without harming future generations.

Define Carbon Footprint.

Amount of harmful greenhouse gases a firm emits.

What is Green Marketing?

Marketing environmental products and practices for competitive advantage.

What are some challenges in the Global Arena regarding ethics?

Bribery and corruption; responsibilities to workers abroad; codes of conduct for vendors addressing human rights, wages, safety, and environmental impact.

What proactive (practical) example from McDonald’s UK is mentioned?

Recycling 100% of cooking oil, recycling 17 tons of cardboard per year, and using shell cups.

What is a Social Audit?

An ongoing systematic evaluation of how well a firm is meeting its ethics and social responsibility objectives.

Why do companies self-regulate ethics and social responsibility?

Because of activist customers, investors, unions, environmentalists, and community groups, plus the threat of government legislation.