Business Ethics in Canada: Responsibility, Equity, and Sustainability

Comprehensive vocabulary flashcards covering the core principles, legal structures, stakeholder models, governance practices, and ethical frameworks found in Business Ethics in Canada (6th Edition).

The Good Company Model

A foundational framework conceptualizing corporate responsibility across three interrelated pillars: Good Management (linking ethics to management), Good Organization (managing ethics inside the organization), and Good Citizenship (going beyond organizational boundaries).

Social Licence

The privilege of operating in a society with minimal formalized restrictions—such as legislation, regulation, or market requirements—based on maintaining public trust by doing what is acceptable to stakeholders.

Social Contract

The mutual expectation of behaviour between business and society, wherein society grants business the legitimacy and social licence to operate as long as it satisfies societal expectations.

Concession Doctrine

The historical doctrine establishing that incorporation is conferred by a public act of the sovereign and cannot be created solely through private contractual agreements among individuals.

Levels of Sociological Analysis

A framework categorizing societal attitudes and influences on business into three levels: the Macro Level (nation, legal system, economy), the Meso Level (organizations, communities, political parties, ethnic groups), and the Micro Level (individuals, relationships, families).

Ethical Relativism

The belief that ethical answers depend strictly on the situation or personal reference point and that no universal rules or standards exist to evaluate morality.

Principle of Integrity

The ethical requirement that an entire action must be good (the act itself is good and the intended goal is good), establishing that a good end never justifies morally bad means.

Personal Virtue Ethic

An agent-focused ethical theory holding that an action is right only if a virtuous person would do the same in the identical circumstance, propelled by character and the pursuit of human excellence.

Ethical Egoism

An agent-focused ethical theory positing that individuals should act exclusively according to their own self-interest and set their own standards of benefit, holding that altruism is unacceptable.

Ethic of Caring

An agent-focused ethical theory advocating that decision-makers build a sense of community through care, promoting the well-being of all parties involved to find equitable solutions that alleviate suffering.

Utilitarian Ethic

A goal-focused ethical theory centered on the principle of utility, distributing benefits and harms to maximize net good for the greatest number of people.

Universal Rules Ethic

A deontological ethical theory grounded in Immanuel Kant's categorical imperative, obligating people to act only on maxims they would want to become universal laws and to treat humanity never merely as a means, but always as an end.

Ethic of Holism

A deontological, ecocentric theory asserting that all living and non-living beings are equal and important, drawing on kincentricity (nature as extended family) and seven generations thinking.

Four-Step Ethical Decision-Making Process

A sequential model of moral action comprising Step 1: Recognize Moral Issue, Step 2: Make Moral Judgments, Step 3: Establish Moral Intent, and Step 4: Engage in Moral Behaviour.

Moral Intensity

The perceived magnitude of ethical importance of an issue, determined by six factors: magnitude of consequence, social consensus, probability of effect, temporal immediacy, proximity, and concentration of effect.

Kohlberg's Stages of Moral Development

A psychological framework explaining moral reasoning across three levels: Pre-Conventional (punishment/obedience and instrumental exchange), Conventional (mutual interpersonal expectations and law/order), and Post-Conventional (social contract and universal ethical principles).

Right of Private Property

The legal right of individuals and enterprises to own and use economic goods (such as land and buildings) as they see fit without direct government ownership.

Aboriginal Title

The inherent collective right of Indigenous peoples to their ancestral lands or territories, constitutionally protected under Section 35 of the Constitution Act (1982).

Inequity-to-Equity Continuum

A five-stage progression describing organizational responses to discrimination: Unequal (perpetuates inequalities), Uninformed (ignores norms), Sensitive (acknowledges inequalities without addressing them), Specific (addresses intersectional needs), and Transformative (transforms harmful systems).

Protestant Work Ethic

A code of values asserting that work is desirable, a natural activity, and good in and of itself, while framing unemployment as an individual deficiency or temporary misfortune.

Consumer Sovereignty

The assumption that consumers command production in a market economy by dictating which goods and services businesses provide through their independent purchasing choices.

Self-Regulatory Organizations (SROs)

Industry or professional groups delegated official regulatory functions, including the development, implementation, and enforcement of operating standards and ethical codes (e.g., TSX, IIROC, MFDA).

Private (Civil) Regulation

Voluntary governance led by non-profit, independent bodies that establish operational standards and third-party certifications (e.g., MSC, FSC) without state enforcement.

Code of Conduct

A formal set of externally imposed, non-negotiable rules specifying what organizational members must or must not do, backed by disciplinary penalties.

Code of Ethics

A self-imposed statement of values and guiding principles that empowers individuals to act according to their consciences, articulating what the organization stands for without imposing formal penalties.

Pagano Test

A practical six-question ethical checklist for decision-makers: Is it legal? (core starting point), Benefit-cost test, Categorical imperative, Light of day test, Do unto others, and The ventilation test (seeking a wise peer's objective counsel).

Conflict of Interest

A situation where an individual holds a personal interest sufficient to appear to influence the objective exercise of their fiduciary duties; categorized as real, apparent, or potential.

Integrity Management

An ethics program approach that unifies compliance-based methods (auditing, policies, and sanctions to deter misconduct) with values-based methods (aspirational principles and self-governance to inspire responsible conduct).

Executive Ethical Leadership Styles

A leadership model classifying executives based on personal versus managerial morality into four types: Hypocritical (strong managerial, weak personal), Unethical (weak managerial, weak personal), Ethical (strong managerial, strong personal), and Ethically Silent (weak managerial, weak or strong personal).

Rights Holder

An individual, group, or ecosystem possessing legal or inherent entitlements to protection, respect, and remedy against harm and human rights violations.

Issue Life Cycle

A developmental model tracing the awareness and impact of public issues through five phases: T1 (Emergent), T2 (Increasing awareness), T3 (Prominent), T4 (Peak/Crisis), and T5 (Declining awareness).

Stakeholder Salience Typology

A stakeholder evaluation framework that prioritizes claims based on the degree to which a stakeholder possesses three core attributes: power, legitimacy, and urgency.

Position/Importance Matrix

A strategic stakeholder mapping matrix that plots a stakeholder's position on an issue (-5 Oppose to +5 Support) against their importance (0 Least to 10 Most), yielding four quadrants: Problematic, Antagonistic, Low Priority, and Supporter.

Fink's Anatomy of a Crisis

A four-stage crisis management framework consisting of the Prodromal Crisis (warning signs emerge), Acute Crisis (damage occurs), Chronic Crisis (lingering post-mortem/clean-up phase), and Crisis Resolution (recovery).

FOSTERing Relationships Framework

A collaborative six-step stakeholder engagement model: Creating a Foundation, Organizational Alignment, Strategy Development, Trust Building, Evaluation, and Repeat the Process.

Fourth Sector

An emerging hybrid economic sector of for-benefit enterprises that merge private sector market mechanisms with social sector public-benefit objectives.

Stages of CSR

A five-stage developmental model of corporate responsibility: Defensive (denial and legal defense), Compliant (meeting the legal minimum), Managerial (embedding issues into daily value-chain operations), Strategic (integrating issues into core strategy for competitive advantage), and Civil (promoting collective industry-wide standards).

Social Enterprise / Non-Profit Sustainability Matrix

A strategic matrix evaluating programs across two axes—social impact (low vs. high) and financial viability/profitability (low vs. high)—divided into Cells 1 through 4 to identify program sustainability.

Social Capital Framework

A value-creation model showing how Relationship Quality (structural, relational, and cognitive ties) creates Social Capital (goodwill and trust), which manifests in network behaviours and realizes tangible Business Value.

Sustainable Capitalism

An economic model wherein commerce seeks to maximize long-term wealth creation by integrating and accounting for all material environmental, social, and governance (ESG) factors.

Corporate Social Integration

The strategic alignment of business operations with society by analyzing inside-out linkages (corporate impacts on society) and outside-in linkages (social factors influencing competitive advantage).

Corporate Governance Hierarchy

The formal structure through which legal and fiduciary authority flows downward from Canadian Law to Shareholders (owners), to the Board of Directors (governance), to Management (control), and finally to Employees.

Socially Responsible Investing (SRI)

An investment strategy that incorporates environmental, social, and governance (ESG) factors into asset allocation decisions through positive screening, negative screening, or best-of-sector methodologies.

Independent (Unrelated) Director

A member of a corporate board who is free from any business, family, or personal relationship that could materially interfere with their ability to act in the best interests of the corporation.

Say-on-Pay

A corporate governance mechanism permitting shareholders to cast an advisory or binding vote on the compensation packages of top corporate executives.

Insider Trading

The illegal buying or selling of corporate securities using material, non-public information that an ordinary investor would use to value the company's shares.

The Moral Minimum

The baseline ethical hierarchy establishing that an actor has a primary duty to cause no harm before advancing to prevent harm, remove harm, and ultimately promote good.

Societal Contract with Businesses

A conceptual framework defining corporate obligations across three levels: Formal Contracts (explicit regulations and private contracts), Semiformal Contracts (implicit expectations like industry codes and brand promises), and Frontier Expectations (unfolding societal standards).

Moral CSR Pyramid

A reimagined responsibility model placing Ethical Responsibility at the center, surrounded by Organizational Purpose, Glocal Citizenship, and Social Value, contrasting with Carroll's classic hierarchical pyramid.

Triple-E Bottom Line (TBL)

An expanded corporate accounting and performance evaluation framework that summarizes the economic, ethical, and environmental value an organization creates or destroys.

Community Investment (CI) Strategies

A three-tier model of corporate community engagement: Investment (Giving Back through one-way resource provision), Involvement (Building Bridges through two-way consultations), and Integration (Changing Society through jointly managed, collaborative projects).

Cause-Related Marketing

A commercial marketing arrangement where a company pledges to donate a portion of product sales revenue to a designated charitable cause or non-profit organization.

Impact and Benefit Agreements (IBAs)

Bilateral, negotiated contracts between commercial developers and Indigenous nations that specify local employment targets, economic benefits, environmental protections, and consent terms.

The VBA Model

A unifying CSR meta-model proposing that the proper role of business in society is achieved by generating sustainable Value, Balancing stakeholder interests, and upholding transparent Accountability.