Chapter 2 Ethics and Social Responsibility in Business

VOCABULARY flashcards covering key terms from Chapter 2: Ethics and Social Responsibility in Business.

Ethics

The study of right and wrong and of the morality of the choices individuals make.

Business ethics

The application of moral standards to business situations.

Ethical issues

Issues that arise from a business’s relationships with investors, customers, employees, creditors, suppliers, or competitors.

Stakeholders

Groups with an interest in the organization—investors, customers, employees, creditors, suppliers, and competitors—who pressure managers.

Fairness and Honesty

Expectations that businesspeople refrain from knowingly deceiving, misrepresenting, or intimidating others.

Conflicts of Interest

Situations in which personal interests conflict with the employer’s interests; can involve payments or gifts in business deals.

Code of ethics

A guide to acceptable and ethical behavior as defined by the organization.

Listen and learn

Recognize the problem or decision-making opportunity and listen and review until you understand others.

Identify the ethical issues

Explain how co-workers and consumers are affected; consider your own feelings and the viewpoints of those involved.

Create and analyze options

Generate as many alternatives as possible and assess which offer the best long-term results for you and the company.

Identify the best option

Select the best option from your point of view by testing against criteria such as respect, honesty, fairness, and openness.

Explain your decision and resolve differences

Explain the decision; may involve neutral arbitration or time for reconsideration.

Social responsibility

The recognition that business activities impact society and the consideration of that impact in business decision making.

Corporate citizenship

Adopting a strategic approach to fulfilling economic, ethical, environmental, and social responsibilities.

Economic model of social responsibility

The view that society benefits most when business is left alone to produce and market profitable products that society needs.

Socioeconomic model of social responsibility

The concept that business should emphasize not only profits but also the impact of its decisions on society.

Consumerism

All activities undertaken to protect the rights of consumers.

Right to Safety

The consumer’s right to safety in products and services.

Right to Be Informed

The right to be provided with complete information about products and services.

Right to Choose

The right to access a variety of products and services.

Right to Be Heard

The right to have a voice in product and policy decisions that affect consumers.

Right to Consumer Education

The right to education about consumer issues and rights.

Right to Service

The right to prompt and quality service from providers.

Major consumerism forces

Consumer advocates and organizations, consumer education programs, and consumer laws.

National Environmental Policy Act (1970)

Established the Environmental Protection Agency (EPA) to enforce federal environmental laws.

Clean Air Act (1970)

Provided stringent emission standards for cars, aircraft, and factories.

Water Quality Improvement Act (1970)

Strengthened water pollution regulations and provided for large monetary fines against violators.

Resource Recovery Act (1970)

Expanded the solid-waste disposal program and provided for enforcement by the EPA.

Oil Pollution Act (1990)

Expanded oil-spill prevention and response activities and established the Oil Spill Liability Trust Fund.

Environmental Protection Agency (EPA)

Federal agency charged with enforcing laws designed to protect the environment.

Green marketing

The process of creating, making, delivering, and promoting products that are environmentally safe.

Public health responsibility

The belief that businesses have a basic obligation to contribute to public wellbeing, including concerns such as obesity, smoking, heart disease, alcohol use, and distracted driving.

Minority

A racial, religious, political, or other group that is different from the larger group and often experiences unfavorable treatment.

Affirmative action

A plan designed to increase the number of minority employees at all levels of an organization, often supported by EEOC enforcement.

Equal Employment Opportunity Commission (EEOC)

Government agency with the power to investigate complaints of employment discrimination and to sue firms that practice it.

Hard-core unemployed

Workers with little education or vocational training and a long history of unemployment.

Sexual harassment programs

Programs and formal policies to reduce bullying, harassment, and other abusive conduct in the workplace.

Do Not Call Implementation Act (2003)

Directed the FCC and the FTC to coordinate rules regarding telemarketing and the Do Not Call Registry.

Dodd–Frank Act (2010)

Promoted financial stability by improving accountability in the financial system and created the Consumer Financial Protection Agency to regulate mortgages, car loans, and credit cards.

Truth in Lending Act (1968)

Required lenders to disclose the full cost of finance charges in dollars and annual percentage rates.

Fair Debt Collection Practices Act (1977)

Outlawed abusive collection practices by third parties.