BLAW 400 Exam 2

Individual frameworks for ethical behavior

Gender, age, nationality, education, and locus of control

Locus of control

individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements

External locus of control

individuals with this locus of control see themselves as going with the flow because that is all they can do

Internal locus control

individuals with this locus of control believe they control the events in their lives by their own effort and skill; they view themselves as masters of their destinies and trust in their capacity to influence their environment

Organizational framework of ethical behavior

Corporate culture, ethical culture, and obedience to authoirty

Corporate culture

a set of values, norms, and artifacts, including ways of solving problems that employees of an organization share

Ethical culture

acceptable behavior, defined by the company and industry

Significant others

those who have influence in a work group, including peers, managers, coworkers, and subordinates

Obedience to authority

a reason employees resolve business ethics issues by simply following the directives of a superior

Principles

widely accepted, used to develop values and standards, establishes pervasive boundaries for behavior, valued across cultures

Values

subjective and related to choice, used to develop norms, provides guidance to organizations, differs across cultures and firms

Why effective leadership is important for organizational ethical culture

Without top-level support for ethical behavior, the opportunity for employees to engage in their own personal approaches to business decision making will evolve

Moral philosophy

the specific principles or values people use to decide what is right and wrong

Economic value orientation

associated with values quantified by monetary means, if an act produces more economic value for its effort, then it should be accepted as ethical

Teleology

stipulates acts are morally right or acceptable if they produce some desired result, such as realization of self-interest or utility; ends justify the means

Egoism

defines rights or acceptable actions as those that maximize a particular person's self-interest as defined by the individual

Utilitarianism

defines right or acceptable actions as those that maximize total utility; greatest good for the greatest number of people

Deontology

focuses on the preservation of individual rights and on the intentions associated with a particular behavior rather than on its consequences; inalienable rights and that somethings are inherently right/wrong

Relativist

evaluates ethicalness subjectively on the basis of individual and group experiences

Virtue ethics

assumes what is moral in a given situation is not only what conventional morality requires but also what a mature person with a "good" moral character deems appropriate

Justice

evaluates ethicalness on the basis of fairness

Different stages of Kohlberg's Model of Cognitive Development

Punishment and obedience, individual instrumental purpose and exchange, mutual interpersonal experience, and social system and conscience maintence

Punishment and obedience

right and wrong are not connected with any higher order or philosophy, but rather with a person who has power

Individual instrumental purpose and exchange

individuals evaluate behavior on the basis of its fairness to them

Mutual interpersonal expectations, relationships, and conformity

emphasizes the interest of others rather than simply those of themselves

Social system and conscience maintenance

what is right is determined by considering duty to society, not just to certain other people

White collar crimes

crimes perpetrated by nonviolent business criminals; tend to be highly educated and in positions of power

Organizational culture

shared values, norms, and artifacts that influence employees and determine behavior

Corporate culture

shared beliefs top managers in a company have about they should manage themselves and other employees, and how they should conduct their business

Sarbanes Oxley 404

requires firms to adopt a set of values that forms a portion of the company's culture; characteristics of an ethical corporate culture were codified within its compliance section

4 different organizational culture classifications

apathetic culture, caring culture, exacting culture, and integrative culture

Apathetic culture

minimal concern for either people or performance

Caring culture

high concern for people but minimal concern for performance

Exacting culture

little concern for people but high concern for performance

Integrative culture

high concern for both people and performance

Centralized organizations

decision making authority is concentrated in the hands of the top-level managers and little authority is delegated to lower levels

Decentralized organizations

decision making authoirty is delegated as far down the chain of commands and possible

Whistleblowing

Exposing an employer's wrongdoing to outsiders such as the media or government regulatory agencies

Responsibility of corporations to stakeholders

Society holds companies accountable for the conduct and decisions of their employees as well; corporations are viewed as moral agwnts accountable for their conduct to their stakeholders

Compliance orientation

a control system that created order by requiring employees to identify with and commit specific required conduct

Values orientation

a control system that strives to develop shared values

Codes of conduct

formal statements that describe what an organization expects of its employees

Code of ethics

consists of general statements, sometimes altruistic or inspirational, that serve as principles and as basis for rules of conduct

Value statement

a declaration of an organization's top prioprities that serves the genral public and also addresses distinct groups such as stakeholders

ISO 19600

a framework that emphasizes a "principles" approach to compliance management based upon commitment, implementation, monitoring and measuring, and continual improvement

ESG

a framework for evaluation of firm performance in the areads of environmental, social, and governance

Triple bottom line

a perspective that takes into account the social, environmental, and financial impacts of decisions made within an organization