Ethics and Business Decision Making

Flashcards covering key vocabulary related to ethics and business decision-making, including concepts like ethical fading, corporate social responsibility, and various ethical theories, based on the provided lecture notes.

Blind Spot (Ethical)

An unknown obstacle that prevents individuals from recognizing their own unethical behavior, creating a gap between their self-perception and reality.

Ethical Fading

The removal of ethics from the decision-making process, leading individuals to believe they act ethically when they do not.

Ethics

The study of right and wrong behavior; concerned with whether an action is fair, right, or just.

Business Ethics

The application of moral and ethical principles to decision-making in the marketplace and workplace.

Values

Relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior and reflect their sense of right and wrong.

Gray Areas (in Law and Ethics)

Situations in the law where the legal standing is unclear, requiring business leaders to contemplate the ethical implications of a decision beyond mere legality.

Fiduciary Duties

Complex ethical obligations owed by directors and officers to various stakeholders, including the company, shareholders, customers, community, employees, and suppliers.

Stakeholders

All parties who have an interest in a business, including the company, shareholders, customers, community, employees, and suppliers.

Integrity

The quality of being honest and having strong moral principles; considered foundational for ethical conduct.

Short-Run Profit Maximization

A business approach that focuses solely on maximizing profits in the immediate term, which can sometimes conflict with long-term ethical considerations or societal well-being.

Ethical Reasoning

The systematic process by which an individual analyzes a situation based on their moral convictions or ethical standards.

Religious Ethical Standards

An ethical framework where the rightness or wrongness of an action is determined by its conformity to an absolute rule of behavior, regardless of the actor's motive.

Outcome-based Ethics (Utilitarianism)

An ethical approach where an action's morality is judged by whether it produces the greatest good for the greatest number of people, often requiring a cost-benefit analysis.

Corporate Social Responsibility (CSR)

The concept that those who manage corporations should be accountable to society for their actions and consider the broader impact of their decisions.

Moral Minimum

A theory of social responsibility stating that businesses should avoid causing harm and compensate for harm caused; also refers to simply obeying the law as the minimum ethical standard.

Stakeholder Interest Theory

A theory of social responsibility asserting that businesses should consider the interests of all stakeholders, including stockholders, employees, customers, suppliers, creditors, and the local community.

Corporate Citizenship Theory

A theory of social responsibility advocating that businesses should actively do good and contribute to solving social problems in society.

Ethical Codes of Conduct

Formal guidelines established by organizations to define acceptable ethical behavior for employees and guide decision-making.

Employee Ethics Training

Programs designed to educate employees on ethical principles, company policies, and how to navigate ethical dilemmas in the workplace.

Legal Compliance

Adhering to all applicable laws and regulations; while it is the 'moral minimum,' simply obeying the law does not automatically guarantee ethical business practice.