Bus 166 Exam 2

Business Ethics

Principles and standards guiding behavior in business.

Corporate Culture

Shared values, norms, and practices within a company.

Employee Ethics Training

Programs that teach employees how to recognize and respond to ethical issues.

Ethical Leadership

Leading by example in demonstrating ethical conduct.

Ethics

Moral principles that define right and wrong behavior.

Ethics and Compliance Officer

A company employee responsible for ensuring ethical behavior and compliance with laws.

Ethics Policies or Codes

Formal guidelines outlining expectations for ethical behavior in a company.

Ethics Reporting Mechanisms

Systems allowing employees to report unethical or illegal activities (e.g., hotlines).

Human Rights

Basic freedoms and rights to which all humans are entitled.

Justice

The pursuit of fairness and equitable treatment in decisions and policies.

Stages of Moral Development

A framework (by Kohlberg) describing how individuals grow in moral reasoning.

Utilitarian Reasoning

Decision-making that focuses on outcomes benefiting the majority.

Virtue Ethics

Focus on character and virtues in making ethical decisions.

Antitrust Laws

Laws designed to promote competition and prevent monopolies.

Deregulation

Removal or reduction of government rules and regulations.

Economic Regulation

Government rules that influence business behavior in economic matters (prices, entry).

Fiscal Policy

Government decisions on taxation and spending.

Market Failure

When markets fail to allocate resources efficiently or fairly on their own.

Monetary Policy

The Federal Reserve’s actions to manage the money supply and interest rates.

Natural Monopoly

A market where one provider dominates due to high infrastructure costs.

Negative Externality

Harmful side effect of business activity that affects others.

Public Policy

A plan or action by government to solve societal problems.

Regulation

Rules established by government to control business conduct.

Reregulation

Reintroduction or strengthening of government regulations.

Social Assistance Policies

Programs designed to support vulnerable populations (welfare, food assistance).

Social Regulation

Rules focused on protecting health, safety, and the environment.

Advocacy Advertising

Ads that promote a company’s views on public issues to shape public opinion.

Corporate Political Strategy

Actions businesses take to influence public policy or government decisions.

Dark Money

Political spending by organizations that do not disclose their donors.

Economic Leverage

Using financial power or market influence to sway political decisions.

Lobbying

Direct efforts to influence policymakers' decisions.

Political Action Committee (PAC)

Organization that raises and donates money to political candidates or parties.

Revolving Door

Movement of individuals between roles in government and private industry.

Super PAC

Political action committee that can raise unlimited funds but can't coordinate directly with candidates.

Trade Association

Group of businesses in a specific industry that advocate for common interests.

Biodiversity

Variety of plant and animal life in ecosystems.

Carbon Neutrality

Achieving net-zero carbon emissions by balancing emissions with removal or offsets.

Carbon Offsets

Investments in environmental projects to compensate for carbon emissions.

Climate Change

Long-term changes in temperature and weather patterns caused by human activity.

Command-and-Control Regulation

Government-imposed rules with specific limits and penalties for non-compliance.

Commons

Shared resources (such as air or oceans) that are vulnerable to overuse.

Environmental Justice

The fair distribution of environmental benefits and burdens across populations.

Environmental Protection Agency (EPA)

U.S. government agency responsible for protecting human health and the environment.

Extended Product Responsibility

The idea that manufacturers are responsible for their products throughout their lifecycle.

Global Warming

The rise in Earth's average temperature caused by increased greenhouse gases.

Industrial Ecology

Designing industrial systems to minimize environmental impact.

Life-Cycle Analysis

Assessing environmental impacts from creation to disposal of a product.

Marine Ecosystems

Ocean habitats and the organisms living within them.

Market-Based Mechanisms

Using financial incentives (like carbon taxes) to reduce pollution.

Ozone

A layer of gas in the atmosphere that protects against harmful UV rays.

Technology Cooperation

Sharing technological innovations between nations or organizations to address environmental problems.

Why should business be ethical?

Builds trust, protects reputation, reduces legal risk, supports long-term success.

Why do ethical problems occur in business?

• Conflicting interests, pressure to meet goals, unclear guidelines, individual character flaws.

Four methods of ethical reasoning:

1. Virtue ethics (What would a good person do?)

2. Utilitarian reasoning (Greatest good for the greatest number)

3. Rights-based reasoning (Protecting individual rights)

4. Justice-based reasoning (Fairness and equitable outcomes)

Four elements of public policy:

1. Inputs

2. Goals

3. Tools

4. Effects

Reasons to justify new regulation:

• Market failure, negative externalities, ensuring fair competition, public interest.

Arguments for political involvement by business:

• Companies are affected by government decisions, right to participate, improve public policy.

Arguments against political involvement by business:

• Unfair advantage, distortion of democracy, potential for corruption.

Information strategy tactics:

• Lobbying, providing research, position papers.

Financial-incentives strategy tactics:

• PAC contributions, hiring former officials.

Constituency-building strategy tactics:

• Grassroots mobilization, advocacy advertising, working with trade associations.

Tragedy of the commons:

• Shared resources get overused and depleted; highlights the need for regulation.

Five global environmental problems:

1. Climate change

2. Ozone depletion

3. Loss of biodiversity

4. Water pollution

5. Decline of marine ecosystems

Advantages and disadvantages of pollution reduction policies:

• Command-and-control: Clear standards, but inflexible and costly.

• Market-based mechanisms: Cost-effective, incentive-driven, but can be hard to enforce.

How sustainability management creates competitive advantage:

• Cost savings, brand reputation, attracting eco-conscious customers, innovation.