Business Ethics and Social Responsibility

Vocabulary flashcards covering ethics, social responsibility, stakeholders, and related examples from the lecture notes.

Ethics

The study and practice of decisions about what is good or right; guides behavior in a particular situation.

Business ethics

The application of ethics to the specific problems and opportunities faced by businesspeople.

Ethical dilemma

A problem in which a firm faces choices about what it should do when there is no clear, right decision.

Social responsibility of business

The community's expectations imposed on firms doing business within its borders.

Community expectations

Standards or norms that communities have for how firms should behave.

Milton Friedman

Economist who argued that the only social responsibility of business is to increase profits for shareholders.

Shareholders

Owners who elect the board and expect profit-driven performance.

Stakeholders

All groups affected by a firm's actions, including customers, employees, shareholders, and the community.

Corporate citizenship

Being a responsible member of the community; pursuing profits while meeting societal expectations.

Leadership at all levels

Leadership across the organization essential for aligning profit motives with corporate citizenship.

Employee engagement

The involvement and commitment of employees to firm goals and social performance.

Rigorous measurement of achievements

Systematic tracking of progress toward profitability and social objectives.

Public-private partnerships

Collaborations between government and business to advance shared goals.

AIG bailout

The 2008 bailout of American International Group by the Federal Reserve; later discussed with bonuses and a total cost of about $182 billion.

Case Opener: Accutane advertising

An ethical question about whether reducing advertising costs by not listing all drug complications is appropriate.

Reputation risk

Damage to a firm's reputation when it ignores community expectations or engages in unethical behavior.