Ethics Midterm Review Chapters 1 - 5

Chapter 1 - Introduction

  • Ethics (Definition): The study of what is right and wrong, fair and unfair, and the moral principles that govern a person's or group's behavior.

  • Speak-Up Cultures (Definition): Organizational cultures that encourage employees to voice their concerns about unethical behavior or practices.

  • B-Corps (Definition): Benefit Corporations that meet high standards of social and environmental performance, accountability, and transparency.

  • Cross-selling (Definition): The practice of selling additional products or services to an existing customer.

  • Separation Thesis (Definition): A philosophical concept that separates legal and ethical obligations, suggesting that law does not inherently determine ethical conduct.

  • Relationship between Ethics & the Law (Page 29): Discussion on how ethical standards can influence legal regulations and vice versa; ethical behavior can guide legislation and legal frameworks.

  • Normative vs. Descriptive Sciences:

    • Normative Sciences: Concerned with what ought to be; prescriptive in defining moral standards and principles.

    • Descriptive Sciences: Focus on what is; concerned with describing and explaining phenomena without making moral judgments.

Chapter 2 - Ethical Decision Making

  • Moral Development & Kohlberg’s Theory of Moral Development (Definition & Application) (Page 7):

    • Describes stages of moral development in individuals, where progression through stages reflects an increasing capacity for moral reasoning.

    • Stages include:

    1. Obedience and Punishment Orientation

    2. Individualism and Exchange

    3. Interpersonal Relationships

    4. Maintaining Social Order

    5. Social Contract and Individual Rights

    6. Universal Principles

  • The 6-Step Process of Moral/Rational Decision Making: A structured approach to ethical decision-making that involves:

    1. Identify the ethical issue

    2. Gather information

    3. Evaluate alternative actions

    4. Make a decision

    5. Act on the decision

    6. Reflect on the outcome

  • Role of biases and personality: Discusses how cognitive biases (like confirmation bias) and personal traits can interfere with rational decision-making.

  • Inattentional Blindness (Definition): A psychological phenomenon where an individual fails to perceive an unexpected stimulus that is in plain sight.

  • Change Blindness (Definition): A perceptual phenomenon that occurs when a change in a visual stimulus is introduced and the observer does not notice it.

  • Moral Imagination (Definition): The ability to think beyond traditional frameworks and consider innovative solutions that address ethical dilemmas more creatively.

  • James Rest’s Theory: Emphasizes the importance of recognizing ethical dilemmas as a critical first step in the ethical decision-making process.

  • Obstacles in Applying the 6-Step Process:

    • Satisficing: A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal one.

  • Differences between Maximizers and Satisficers (Definition):

    • Maximizers: Individuals who seek the best possible outcome or decision.

    • Satisficers: People who settle for a decision that is good enough rather than the optimal one.

Chapter 3 - The Three Ethical Frameworks

  • Three Ethical Frameworks (Definitions & Applications):

    • Utilitarianism: A consequentialist theory that suggests the best action is the one that maximizes overall happiness or utility.

    • Free Market Utilitarianism: Focuses on market outcomes and consumer choice.

    • Administrative Utilitarianism: Involves organizational structures determining outcomes based on utilitarian calculations.

    • Deontology: Ethical theory that emphasizes duties and rules. Actions are judged based on adherence to rules rather than consequences.

    • Virtue Ethics: Focuses on the character of the moral agent rather than specific actions; emphasizes virtues and moral character.

  • Challenges to Each Framework: Discussion on potential shortcomings and criticisms of each ethical framework, such as:

    • Utilitarianism can justify harmful actions for the greater good.

    • Deontology may lead to rigid applications of laws without considering context.

    • Virtue ethics can be subjective and culturally relative.

Chapter 4 - Corporate Culture

  • What is Culture and Why Does It Matter?: Culture refers to the shared values, beliefs, and behaviors that shape the environment within an organization, influencing how members interact and make decisions.

  • How Does Culture Influence and Guide Behavior?: Culture establishes norms and expectations that guide employee behavior and decision-making.

  • What is National Culture?: The set of values and practices that are prevalent within a specific country, influencing organizational culture and behavior.

  • Hofstede’s Model of National Culture: Based on six dimensions that characterize national cultures:

    1. Power Distance

    2. Individualism vs. Collectivism

    3. Masculinity vs. Femininity

    4. Uncertainty Avoidance

    5. Long-Term Orientation vs. Short-Term Normative Orientation

    6. Indulgence vs. Restraint

    • Criticism of the Model: Some critiques suggest oversimplification and lack of consideration for subcultures.

  • How Does Culture Get Created?: Culture is created through shared experiences, rituals, historical events, and leadership practices.

  • Two Types of Culture:

    • Values-based Culture: A culture that promotes core values and ethical conduct.

    • Compliance-based Culture: A culture that emphasizes adherence to rules and regulations.

  • Transactional vs. Transformative Leadership:

    • Transactional Leadership: Focuses on exchanging resources and maintaining routine operations.

    • Transformative Leadership: Aims to inspire and motivate employees to achieve greater outcomes through vision and engagement.

Chapter 5 - CSR: Corporate Social Responsibility

  • What is CSR? (Definition & Examples): Corporate Social Responsibility is a business model that helps a company be socially accountable to itself, its stakeholders, and the public. Examples include sustainable sourcing, community development initiatives, and ethical labor practices.

  • The 3Ps or TBL Concept (Triple Bottom Line):

    • People: Social responsibility to employees, customers, and communities.

    • Planet: Environmental stewardship.

    • Profit: Economic viability and shareholder value.

  • What are Some Challenges Regarding CSR?:

    • Definition of responsibility can vary.

    • Differing opinions on the extent of corporate responsibility: whether businesses should prioritize profits or societal welfare.

  • Two Opposing Views about CSR:

    • Business View: Focus on shareholder profits and market efficiency.

    • Societal View: Emphasizes ethical obligations to society beyond profit motives.

  • Advantages and Disadvantages of CSR:

    • Advantages: Enhanced reputation, customer loyalty, and reduced regulatory intervention.

    • Disadvantages: Costs involved, potential for ethical dilemmas, and conflict with profit maximization.

  • The Three Models of CSR (Page 17): Discussion on models that outline different approaches to CSR;

    1. Shareholder Model: Focuses on maximizing shareholder value.

    2. Stakeholder Model: Considers the interests of all stakeholders, not just shareholders.

    3. Social Enterprise Model: Blends profit-making with social or environmental goals.