Business Ethics, Core Values, and Core Competencies

Vocabulary flashcards covering Topic 1.6 Business Ethics and Practice Worksheet on Core Values & Core Competencies.

Business Ethics

The moral principles and standards that guide behavior and decision-making in a business.

Incentive Structure

A system of rewards and penalties that influences employee behavior and decision-making, which if poorly designed can sometimes encourage unethical behavior.

Fraud

Intentional deception for personal or financial gain, such as stealing company property, submitting fake expense reports, or forging company records.

Fyre Festival

An example of fraud involving an event in the Bahamas advertised as a luxury festival that turned out to be nothing like what was advertised.

Financial Misrepresentation

An unethical practice that occurs when a business falsifies financial information to appear more profitable or stable than it really is.

Corruption

The abuse of power for personal gain, including bribery and conflicts of interest.

Deceptive Marketing

Marketing that misleads customers through false claims, hidden fees, or inaccurate product information.

Code of Conduct

A formal set of ethical guidelines that outlines acceptable behavior within a business.

Ethical Dilemma

A situation that occurs when one core value conflicts with another value, goal, or business objective.

Stakeholders

Individuals or groups affected by a business's actions and decisions.

Internal Stakeholders

Individuals within the business, such as owners, managers, and employees.

External Stakeholders

Individuals or entities outside of the business, such as customers, suppliers, and investors.

Core Competency

A firm's specialized capability, operational efficiency, or functional strength that allows it to outperform competitors, such as specialized low-cost manufacturing expertise, rapid product design and launching, or an efficient kitchen.

Core Value

An organization's foundational belief or moral priority that guides decisions and interactions, such as integrity, respect among employees, customer well-being, or accountability.

Walmart's Core Values

Respect individuals, act with integrity, serve our customers and members, and strive for excellence.

Patagonia's Core Values

Quality, integrity, environmentalism, justice, and not bound by convention.

Patagonia's Mission Statement

"We're in business to save our home planet." Its advantage is that people are inclined to support the mission; its disadvantage is that adoption may be costly.

Walmart's Mission Statement

"To help people save money so they can live better." Its advantage is attracting people through savings; its disadvantage is that cutting costs in other areas might reduce product quality.