Business Ethics, Corporate Social Responsibility, and Law

Vocabulary flashcards covering Chapter 5 definitions, theories of ethics, values management principles, CSR models, and key case studies.

Ethics

The set of moral principles or core values used for deciding between right and wrong in everyday personal and professional decisions.

Justice

The maintenance or administration of what is fair, applying equally to all, supported by an enforcement mechanism to ensure compliance, and weighing opposing arguments with due consideration.

Relationship Between Ethics and Law Diagram

A visual representation showing Ethics and The Law as overlapping circles, with the intersection representing actions that are both Ethical & Legal.

Business Ethics

A consciousness of what is right or wrong in the workplace and a commitment to taking responsibility for an ethical course of action in business operations.

Stakeholder

An expansive term that encompasses an entity's owners, investors, employees, customers, suppliers, and the wider community.

Primary Stakeholders

Individuals or entities who will feel a direct impact based on an organizational decision.

Secondary Stakeholders

Individuals or groups who do not have a direct connection to a business but may suffer indirect adverse consequences from its decisions.

Moral Minimum Theory

An ethical approach that encourages a business to do no harm or the least possible harm, operating ethically even at the expense of additional profits.

Maximizing Profits Theory

An ethical strategy where a company strives to make as much money as possible, provided no laws are broken.

Ypsilanti Township v. General Motors Corporation

A Michigan Court of Appeals case ruling that GMC's promises of long-term operations made during tax abatement applications were not legally binding, allowing GMC to close its plant.

Morals

Generally accepted standards of right and wrong in a given society or community, which may originate from law, religion, personal belief systems, or a combination of these.

Principles-Based Approach

An ethical framework encompassing moral theories grounded in general or universal principles, including religion, virtue, natural law, and universal moral duties.

Virtue Ethics

A principles-based tradition traced back to Aristotle that evaluates conduct based on whether it promotes good moral character through actual virtuous acts.

Natural Law Theory

A moral philosophy holding that universal rights and moral values are discoverable through human reason; popularized by medieval theologian Thomas Aquinas.

Duty-Based Ethics

Immanuel Kant's ethical philosophy stating that individuals should act morally out of a sense of duty to human dignity, rather than from ulterior motives.

Categorical Imperative

Immanuel Kant's moral test asking 'What if everybody took that same action?' (the universalization test) to determine if an action is morally sound.

Consequences-Based Approach

An ethical framework rooted in utilitarianism stating that the ethical decision is the one providing the greatest good for the greatest number of people with the least harm.

Contract-Based Approach

John Rawls' contractarian theory proposing that ethical rules are created by individuals negotiating fair principles for society from a hypothetical Original Position.

Veil of Ignorance

John Rawls' hypothetical concept where negotiators are blinded to all personal facts about themselves, ensuring they negotiate fair and unbiased ethical rules for everyone.

Maximin Strategy

A strategy proposed by John Rawls in the Original Position where negotiators select options that maximize the prospects of the least well-off in society.

Values Management

An organizational practice focusing on prioritizing moral values for a business and ensuring workplace behaviors align with those values.

Broadcast News Test

An ethical assessment method where managers evaluate a decision by asking how they would feel if it were publicly announced on social media or local and national news.

Ethical Decision-Making Paradigm Diagram

A 5-step framework detailing: 1. Define the dilemma, 2. Identify impact, 3. Apply standards, 4. Develop choices and discuss impact with constituencies, and 5. Implement, evaluate, and monitor.

MF Global Staff Report Case Study

A congressional report criticizing CEO John Corzine's risky investments in European sovereign debts, which led to bankruptcy and $1.6 billion missing from customer accounts.

Corporate Social Responsibility (CSR)

A broad-based identification of important business and social issues coupled with a critique of business organizations and their practices.

Narrow View of CSR

Milton Friedman's view that a business's sole responsibility is maximizing shareholder wealth, relying on Adam Smith's 'invisible hand' to benefit society.

Moderate View of CSR

The 'government hand' perspective holding that a business's ethical obligation is simply to comply with government laws and regulatory guidelines.

Broad View of CSR

The 'good corporate citizenship' perspective holding that businesses should promote economic, legal, ethical, and philanthropic responsibilities to all stakeholders.

Triple Bottom Line

A component of the broad CSR view requiring managers to focus not only on economic profit, but also on the creation or destruction of environmental and social value.

Brooks Brothers Group, Inc. v. Bubbles by Brooks, LLC

A trademark dispute where retailer Brooks Brothers eventually settled and withdrew its opposition to cancer survivor Amy Brooks' trademark application for her soap business.

Grimshaw v. Ford Motor Company

A product liability lawsuit where a California appellate court upheld $125 million in punitive damages against Ford for using cost-benefit analysis to justify not fixing a hazardous fuel tank flaw in the Pinto.