MGT 5600 Exam 1

social responsibility

an organizations obligation to maximize its positive impact on stakeholders and minimize its negative impact

social responsibility pyramid (from bottom to top)

economic responsibility, legal responsibility, ethical responsibility, discretionary responsibility

milton friedman on stakeholder vs shareholder model

market is a better deterrent to wrongdoing, a company maximizing their profit is a company being socially responsible

stakeholders

those who have a stake or claim in some aspect of a company’s products, markets, industry, and outcomes; customers, shareholders, employees, suppliers, government agencies, and communities

shareholders

an individual, company, or institution that owns at least one share of a company and therefore has a financial interest in its profitability; owners, investors

shareholder model

founded in classical economic percepts, including the goal of maximizing wealth for investors and owners

stakeholder model

a broader view of the purpose of business that considers stakeholder welfare in tandem with corporate needs and interests

primary stakeholders

market stakeholders; customers, employees, and shareholders

secondary stakeholders

non-market stakeholders; media, trade organizations, and special interest groups

sustainability

the potential for the long-term well-being of the natural environment, including all biological entities, as well as beneficial interactions among nature and individuals, organizations, and business strategies

ecological approach

nonhumans have intrinsic value

environmental approach

humans have a right to a livable environment

markets approach

external costs violate utility, rights, and justice

air pollution

typically arises from three different sources: stationary, mobile, and natural

water pollution

one of the biggest contributors to illness in developing worlds, increasing fear over water quantity

land pollution

dumping of residential and industrial wastes

deforestation

forests, covering less than 30% of the planet, are being destroyed

climate change

the long-term variation in average weather patterns

kyoto protocol

international treaty adopted in 1997 that aimed to reduce the emission of gases that contribute to global warming; commitment period of 2008-2013

doha amendment

amendment to the kyoto protocol establishing a second commitment period of 2013-2020

greenwashing

misleading a consumer into thinking a good or service is more environmentally friendly than it really is

mandated responsibilities

laws, rules, regulations, and other requirements

pro-competitive legislation

prevent the establishment of monopolies, inequitable pricing strategies

consumer protection laws

require businesses to provide accurate information about their goods and services and follow safety standards

consumer protection agencies

Bureau of Consumer Protection, Food and Drug Administration

voluntary responsibilities

include the beliefs, values, and voluntary contractual obligations of a business

types of voluntary responsibilities

cause-related marketing, strategic philanthropy, and social entrepreneurship

cause-related marketing

ties an organization’s products directly to a social concern through a marketing program

strategic philanthropy

the synergistic and mutually beneficial use of an organization’s core competencies and resources to bring about organizational and societal benefits

social entrepreneurship

social enterprise, an entrepreneur founds an organization with the purpose of creating social value; creates a solution to a social problem rather than simply earning profits

the Sarbanes Oxley act

passed in response to widespread corporate accounting scandals, made fraudulent financial reporting a criminal offense and strengthened penalties for corporate fraud

section 201

part of the Sarbanes Oxley act, ensured auditor and analyst independence

Public Company Accounting Oversight Board (PCAOB)

created by the Sarbanes Oxley act

whistleblower protection with Sarbanes Oxley

employees are responsible for reporting unethical behavior, intends to motivate employees through whistleblower protection: employers cannot pursue legal action against employees (did not protect from being penalized prior to financial crisis)

Dodd-Frank Wall Street Reform and Consumer Protection Act

seeks to improve financial regulation, increase oversight of the industry and prevent risk taking, deceptive practices; created two new financial agencies: the Office of Financial Research and the Financial Stability Oversight Council (FSOC)

whistleblower bounty program

part of the Dodd-Frank act, whistleblowers who report to the SEC and Commodities Exhange Commission can receive 10-30% of the fines and settlements if their report results in conviction of more than $1 million

title VII of the civil rights act

prohibits discrimination in employment on the basis of race, sex, religion, color, or national origin; created the Equal Employment Opportunity Commission (EEOC)

ethical awareness

the ability to perceive whether a situation involves an ethical dimension

ethical issue

a specific situation in which there could be an ethical dimension to the issue at hand

ethical dilemma

a situation in which a person much grapple with their ethics in order to make a decision

foundational values for identifying ethical issues

integrity, honesty, and fairness

ethical issues in business

misuse of company times and resources, abusive behavior, lying, conflicts of interest, bribery, corporate intelligence, discrimination, sexual harassment, and fraud

misuse of company time and resources

long lunch breaks, inappropriate sick days, excessive socializing, engaging in personal activities, and overall not working when on the clock

abusive behavior

physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, unreasonability, and bullying

bullying

hostile workplace where a person or group is threatened, harassed, or overly criticized

types of lying

commission lying and omission lying

commission lying

creating a perception or belief by words that intentionally deceive the receiver of the message

creating noise

a type of commission lying that entails one using technical explanations that the communicator know the listener does not understand, used to create confusion

omission lying

intentionally not informing others of any differences, problems, safety warnings or negative issues relating to the product or company

conflicts of interest

when an individual must choose whether to advance their own interest, those of the organization, or those of some other group; dual relationships can lead to conflicts of interest

dual relationships

a personal, loving, and/or sexual relationship with someone with whom you share professional responsibilities

types of bribery

active and passive

active bribery

when the person who promises or gives the bribe commits the offense

passive bribery

offense committed by the official who receives the bribe

facilitation payments

payments made to obtain or retain business or other improper advantages, does not constitute bribery payments for U.S. companies in SOME situations

corporate intelligence

not an ethical issue if the information it obtained legally; questionable or illegal techniques used to obtain information: hacking, social engineering, and shoulder surfing

discrimination

prejudices based on race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status; illegal in the United States

sexual harassment

any repeated, unwanted behavior of a sexual nature perpetuated upon one individual by another

types of fraud

accounting, consumer, and marketing

accounting fraud

inaccurate information in a corporations financial reporting

consumer fraud

when consumers attempt to deceive businesses for their own gain

marketing fraud

dishonestly promoting and pricing products

puffery

a type of marketing fraud that entails an exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely upon and is not actionable