Chapter Three Business Ethics

Organizational Ethics

Why should HR be directly involved in any code of ethics

To ensure that ethical guidelines align with the company culture and values, facilitate training and communication about ethical practices, and enforce compliance among employees, fostering a transparent and accountable workplace.

Organizational Culture

The values, beliefs, and norms that all the employees of an organization share.

Value Chain

The key functional inputs that an organization provides in the transformation of raw materials into a delivered product or service.

Human resource management

The strategic approach to the effective management of people in an organization, ensuring alignment with business goals and fostering a positive work environment.

Finance

The management of large amounts of money, particularly by governments or large companies, involving investments, budgeting, and forecasting for financial growth.

Information Systems

The integrated set of hardware, software, and processes used to collect, store, manage, and analyze data within an organization.

Management

The process of planning, organizing, leading, and controlling resources to achieve specific goals efficiently and effectively within an organization.

Four primary line funtions

that are essential for effective management within an organization, including Information systems, management, finance, and human resources.

five key functional areas within an organization

include marketing, operations, finance, human resources, and information technology.

Utilitarianism

Ethical choices that offer the greatest good for the greatest number of people.

Universal Ethics

Actions that are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of the situation, because the universal principles are seen to apply to everyone, everywhere, all the time.

Three functional components of the marketing process

are evaluation, planning, and implementation in order to effectively reach customer needs and achieve business goals.

How is marketing ethical

Marketing is ethical when it respects customer autonomy, promotes honest communication, and follows legal and moral standards while aiming to serve societal interests.

how is marketing unethical

Marketing is unethical when it manipulates consumer behavior, uses deceptive practices, exploits vulnerable populations, or disregards honest communication and ethical guidelines.

why would HR members consider themselves the conscience in a organization

They uphold ethical standards, ensure fair treatment of employees, and promote a positive workplace culture that aligns with the organization's values.

Ethics in HR

refers to the principles that guide human resource practices, ensuring fairness, respect for employee rights, and alignment with organizational values.

Why is HRs involvement in the selection of leaders of the company so important to ethical business conduct

it ensures that leaders embody the organization's ethical values and promote a culture of integrity, accountability, and fairness within the workplace.

Why have ethics policies and ethics training suddenly become so important

Companies recognize that ethical conduct is crucial for maintaining reputation, ensuring legal compliance, and fostering trust among stakeholders. These policies help establish clear expectations and provide employees with the tools to navigate ethical dilemmas.

Ethics in finance

refers to the principles that govern financial practices, ensuring transparency, accountability, and integrity in financial reporting and decision-making.

Accounting function

The function that keeps track of all the company’s financial transactions by documenting the money coming in (credits) and money going out (debits) and balancing the accounts at the end of a specified period (daily, weekly, monthly, quarterly, annually).

Auditing function

The certification of an organization’s financial statements, or “books,” as being accurate by an impartial third-party professional. An organization can be large enough to have internal auditors on staff as well as using external professionals—typically certified professional accountants and/or auditing specialists.

GAAP

The generally accepted accounting principles that govern the accounting profession—not a set of laws and established legal precedents but a set of standard operating procedures within the profession.

Three primary areas of finance function in an organization

financial management, investment management, and corporate finance, focusing on managing the company's financial resources, analyzing investment opportunities, and making long-term funding decisions.

How is the accounting watched over by GAAP

outlines the standards and guidelines for accounting practices, ensuring that financial reporting is consistent, transparent, and comparable across organizations.

why would audited accounts be “clean”

they are verified by an independent auditor, confirming that the financial statements are free of material misstatements and accurately represent the financial position of the organization.

Conflict of interest

A situation in which one relationship or obligation places you in direct conflict with an existing relationship or obligation.

Ethical challeneges of research and development

Speed and cost versus quality. R&D teams are expected to create something that can outperform competitors, but management may push for lower expenses and faster deadlines. That pressure can reduce the time available for testing, which raises the risk of defects, safety problems, and costly damage to the company’s reputation.

Ethical challenges for marketing

whether persuasion becomes manipulation when it creates desire rather than responds to it.