Chapter Two Business Ethics

Defining Business Ethics

Business Ethics

The application of ethical standards to business behavior.

Stakeholder

Someone with a share or interest in a business enterprise.

Examples of stakeholders

include employees, customers, suppliers, shareholders, vendors, wholesalers, goverments, creditors, and community.

Explain the difference between a perscriptive and descriptive approach in business ethics

The prescriptive approach outlines how businesses should act according to ethical principles, whereas the descriptive approach examines how businesses actually behave in practice.

How can stakeholders be impcted by unethical behavior of a business

Stakeholders can be impacted by unethical behavior through financial losses, damage to reputation, or loss of trust. This behavior can lead to negative consequences for employees, customers, and the community.

Coperate Governance

The system by which business corporations are directed and controlled.

Oxymoron

The combination of two contradictory terms, such as “deafening silence” or “jumbo shrimp.”

Code of ethics

A company’s written standards of ethical behavior that are designed to guide managers and employees in making the decisions and choices they face every day.

Is the term business ethics an oxymoron

<span>Business ethics refers to the application of ethical principles and standards to business behavior, which can seem contradictory as business practices often prioritize profit over ethics.</span>

Four types of ethical conflict

Truth v Loyalty, Short term v Long term, Justice v mercy, and Individual v communtiy.

Three principles available when solving an ethical dillema

The three principles are ends-based, rules-based, and the golden rule. These principles guide decision-making by evaluating the outcomes, following established rules, or considering how one would want their actions to be treated by others.

Four commonly held rationalizations that can lead to misconduct.

A belief that the activity is within reasonable ethical and legal limits that is not “really” illegal and immoral

A belief that the activity is in the individual’s or the corporation’s best interests. That the individual would be expected to undertake the activity.

A belief that the activity is safe because it will be never be found out or publicized.

A belief that because the activity helps the company, the company will condone it and even protect the person who engages in it