Chapter 1 : Business Ethics Key Terms

Vocabulary flashcards covering key terms and definitions from Chapter 1 and Chapter 2 on business ethics.

business ethics

The conduct by which companies and their agents abide by the law and respect the rights of stakeholders (customers, clients, employees, and the surrounding community and environment).

compliance

The extent to which a company operates in accordance with applicable regulations and statutes.

corporate culture

The shared beliefs, values, and behaviors that shape how employees and managers interact within an organization.

corporate social responsibility (CSR)

The practice of a business viewing itself as part of society with implicit social obligations and responsibility for its environmental and social impact.

deontology

A normative ethical theory stating that ethical decisions require respecting the rights and duties owed to others and acting to do what is right for all stakeholders.

ethical relativism

The view that ethics depends entirely on context.

ethics

The standards of behavior that guide our personal and professional lives.

goodwill

The value of a business beyond tangible assets, including its reputation, brand value, workforce attitude, and customer relations.

integrity

Adherence to a code of moral values, implying trustworthiness and consistency between what we say and what we do.

long-term perspective

A broad view of profit maximization recognizing that effects of decisions may not appear for a long time.

normative ethical theories

A group of philosophical theories that describe how people ought to behave based on reason.

shareholder

an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called stockholder

short-term perspective

A focus on maximizing periodic profits (quarterly and annual).

social contract

An implicit agreement among society to cooperate for social benefit; in business, a company should give back to society that allows it to operate, benefiting the community while enriching itself.

stakeholders

Individuals and entities affected by a business’s decisions, including customers, suppliers, investors, employees, the community, and the environment.

stockholder

an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called shareholder

utilitarianism

A normative theory stating that the ethical act is the one whose consequences maximize good for the greatest number.

virtue theory

A normative theory focusing on proper conduct guided by the values and training one received growing up.