Chapter 2: Ethics and Social Responsibility in Business

Vocabulary flashcards covering key concepts from Chapter 2 on ethics and social responsibility in business.

Ethics

The study of right and wrong and the morality of the choices individuals make.

Business ethics

The application of moral standards to business situations.

Stakeholders

Investors, customers, employees, creditors, suppliers, or competitors; each has specific concerns and usually exerts pressure on the organization's managers.

Fairness and Honesty

Businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others.

Conflict of Interest

When businesspeople pursue their own personal interest over the employer’s interest; may occur when payments and gifts enter into business deals.

Bribes

Gifts, favors, or payments offered to influence an outcome; illegal in the United States and abroad.

Communications (Advertising)

False and misleading advertising is illegal and unethical.

Ethical decision or action

An action that is 'right' according to some standard of behavior.

Level of Ethical Behavior

The degree to which actions conform to moral standards.

Individual Factors

Internal determinants such as knowledge, core values, value-related attitudes, goals, and how those goals are pursued.

Social Factors

External determinants like cultural norms, coworkers’ actions, significant others’ values, and internet use.

Opportunity as a Factor

The amount of freedom to behave unethically and the enforcement level of policies, procedures, and ethical codes.

Government’s Role in Encouraging Ethics

The government can encourage ethical behavior by enacting more stringent regulations.

Sarbanes-Oxley Act of 2002

Provides sweeping legal protection for employees who report corporate misconduct.