BA 100, Chapter 2: Understanding Business Ethics and Social Responsibility

Social Responsibility

The attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities

Organizational Stakeholders

Those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance

Consumerism

Form of social activism dedicated to protecting the rights of consumers in their dealings with business

Collusion

Illegal agreement between two or more companies to commit a wrongful act

Whistle-Blower

Employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible actions by publicizing them

Insider Trading

Illegal practice of using special knowledge about a firm for profit or gain

Obstructionist Stance

Approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations

Defensive Stance

Approach to social responsibility by which a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment

Accommodative Stance

Approach to social responsibility by which a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment

Proactive Stance

Approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment

Regulation

The establishment of laws and rules that dictate what organizations can and cannot do

Lobbying

The use of persons or groups to formally represent an organization or group of organizations before political bodies

Political Action Committees (PACs)

Special organizations created to solicit money and then distribute it to political candidates

Legal Compliance

The extent to which the organization conforms to local, state, federal, and international laws

Ethical Compliance

The extent to which the members of the organzation follow basic ethical (and legal) standards of behavior

Philanthropic Giving

The awarding of funds or gifts to charities or other worthy causes

Corporate Social Audit

Systematic analysis of a firm's success in using funds earmarked for meeting its social responsibility goals