CHAPTER 2

Whistle Blowing

employee who detects unethical actions

Corporate social audit

systematic analysis of a firms’s success in using funds for social responsibility

Ethics

Beliefs of what's right and wrong, good or bad, when and where.

Business ethics

Ethics in the context of a job.

Ethical behavior

Behavior that conforms to individual and social ethics.

Unethical behavior

Behavior that is defined as wrong and bad.

Managerial ethics

Ethics that guide individual managers in their work.

Hiring and firing practices

Practices that should be solely based on an individual's ability to perform a job.

Questionable hiring decisions

Hiring decisions that raise ethical concerns, such as hiring friends or relatives who are qualified.

Wages and working conditions

Managers exploiting the financial vulnerabilities of employees to prevent them from complaining or quitting.

Financial manipulation and employee impact

Encouraging employees to invest in company stock and then restricting their ability to sell during financial difficulties.

Employee behavior toward employers

Conflicts of interest, confidentiality, and honesty in the behavior of employees towards employers.

Conflict of interest

When an individual benefits to the detriment of the employer, such as prohibiting gifts from suppliers to buyers.

Safeguards in competitive industries

Implementing safeguards to prevent issues like designers selling company secrets, such as Disney's ownership of all illustrations.

Honesty concerns

Issues such as stealing supplies, padding expense accounts, abusing sick leave, and using business resources for personal matters.

Ethics in business relationships

Ethics that apply to customers, competitors, stockholders, suppliers, dealers, and unions.

Pharmaceutical industry and pricing

Debates between critics arguing profit at the expense of customers and the industry defending high prices as necessary for research and development costs.

Assessing ethical behavior

Gathering relevant information, analyzing facts, and making ethical judgments.

Utility

Assessing if an action optimizes benefits.

Rights

Assessing if an action respects the rights of all individuals involved.

Justice

Assessing if an action is fair.

Responsibility

Assessing if an action is consistent with people's responsibilities to each other.

Company practices and business ethics

Written codes and ethics programs within a company.

Social responsibility

How well a business attempts to balance its commitments to relevant groups and individuals in its social environment.

Organizational stakeholders

Those affected by the practices of an organization.

Major corporate stakeholders

Employees, investors, communities, customers, and suppliers.

Stakeholder model of responsibility

Treating customers, employees, investors, suppliers, and local communities fairly and honestly.

Customers

Treating them fairly and honestly.

Employees

Treating them fairly and respecting their basic human needs.

Investors

Providing information to shareholders about financial performance.

Suppliers

Creating mutually beneficial partnership arrangements.

Local and international communities

Involvement in programs and charities.

Concept of accountability

Expectation of an expanded role for business in protecting and enhancing the general welfare of society.

Responsibility toward the environment

Addressing issues such as air pollution, water pollution, land pollution, toxic waste disposal, and recycling.

Consumer rights

Protecting the rights of consumers through consumerism and addressing issues such as unfair pricing, collusion, and price gouging.

Consumer bill of rights

Ensuring safe products, informed decision-making, the right to be heard, the right to choose, education about purchases, and courteous service for consumers.

Balance work and life, help keep job skills, treat terminated employees with respect

Responsibilities toward employees.

Equal opportunities

Ensuring equal opportunities for all employees.

Insider trading

Using confidential information to gain from stocks.

Misrepresentation of finances

Misrepresenting finances to make the company seem more successful.

Sarbanes-Oxley Act

Requiring the chief financial officer to personally guarantee financial reporting.

Approaches to social responsibility

Obstructionist, defensive, accommodative, and proactive stances.

Obstructionist stance

Doing as little as possible regarding responsibility.

Defensive stance

Meeting only minimal legal requirements.

Accommodative stance

Exceeding government minimums if asked to do so.

Proactive stance

Seeking opportunities to contribute to the public well-being.

Small business ethics

Individual ethics in the context of small businesses.

Regulation

Laws and rules that dictate what can and cannot be done.

Political action committees

Soliciting money and distributing it to political candidates.

Lobbying

Using individuals to formally represent organizations to the government to help causes.

Legal compliance

The extent to which an organization conforms to all laws.

Ethical compliance

The extent to which members of an organization follow ethical and legal standards of behavior.

Philanthropic giving

Awards or gifts to charities.

Organizational leadership and culture

define the social responsibility stance of an organization