CBA 400 - Chapter 1

Business Ethics

Organizational principles, values, and norms that guide individual and group behavior in business.

Morals

A person’s personal philosophies about what is right or wrong.

Principles

Specific and pervasive boundaries for behavior that should not be violated.

Values

Enduring beliefs and ideals that are socially enforced.

Ethics

Behavior or decisions made within a group’s values or morals.

Stakeholder

A party that has an interest in a company and can either affect or be affected by the business.

Federal Sentencing Guidelines for Organizations (FSGO)

Guidelines that codified into law incentives to reward organizations for taking action to prevent misconduct.

Environmental Social Governance (ESG)

A framework for evaluation of firm performance in the areas of environmental, social, and governance.

Shareholder Primacy

The belief that those in control of the corporation must exercise power only for the benefit of the shareholders.

Natural Rights

The idea that individuals have rights to freedom and private property, as introduced by John Locke.

Free Market/Utility

The theory that self-interest and consumer demand guide producers to supply efficiently what consumers want.

Social Darwinism

The perspective that businesses should operate under the principle of 'survival of the fittest' without government intervention.

Marxism

A critique of capitalism where wealth disparity is seen through the lens of class struggle between laborers and capital owners.

Ethical Culture

Acceptable behavior as defined by the company and industry, reflecting the integrity of decisions made.

New Deal

1930s: A series of programs and policies implemented by Franklin D. Roosevelt in response to the Great Depression, aimed at economic recovery and social reform.

Fair Deal

1950s: A set of proposals put forth by President Harry S. Truman in the late 1940s, aimed at improving social welfare and economic security in the post-World War II era.

Consumer Bill of Rights

A set of principles established in 1962 by President John F. Kennedy to protect consumers, including the right to safety, to be informed, to choose, and to be heard.

The Great Society

A series of domestic programs launched by President Lyndon B. Johnson in the 1960s aimed at eliminating poverty and racial injustice, expanding civil rights, and improving education and healthcare.

Corporate Social Responsibility

An organization’s obligation to maximize its positive impact on stakeholders and minimize its negative impact.

Defense Industry Initiative on Business Ethics and Conduct

An organization developed to guide corporate support for ethical conduct. It was established in 1986 to promote ethical behavior in the defense industry and ensure compliance with laws and regulations.

Federal Sentencing Guidelines for Organizations (FSGO)

Guidelines that codified into law incentives to reward organizations for taking action to prevent misconduct, such as developing effective internal legal and ethical compliance programs.

Sarbanes–Oxley Act

The most far-reaching change in organizational control and
accounting regulations since the Securities and Exchange Act of 1934, which made securities fraud a criminal offense and stiffened penalties for corporate fraud.