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Flashcards in Ch 2 Ethics & decision making Deck (30)
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1

What do Companies hire ethics officers to do?

Develop ethics policies
Listen to complaints of ethics violations
Investigate ethics abuses

2

What is Sarbanes-Oxley Act (SOX) of 2002

Established "higher standards for corporate responsibility and governance"

Made by a Republican and a Democrat (during Bush)

SOX, new listing requirements by stock exchanges, governance standards, and new accounting rules have CREATED A NEW operating environment for business

SOX created the Public Company Accountability Oversight Board, reports to SEC.

3

What is the trend in Contemporary business ethics?

Companies are self regulating with Ethics and compliance programs

4

What are the changing values of ethics and society?

Changing values are changes in society, culture, race etc,
-need to find common principles
-leadership needs to also share values

5

What is economic interdependence?

-All people are connected in the marketplace.
-business leaders decisions make an impact on all of us.
-Executives and managers manipulate corporate actions for their own benefit. Stockholders (owners) do not know it.

6

How does the news media and internet effect ethics?

-Make visible the decisions executives/managers make.
-public can comment on the actions, are they fair, are the values reflected in those decisions compared to society's?

7

What is governments role in ethics?

When companies fail to live up to society's expectations, the govt may step in.
-Companies have developed codes of ethics, Self regulation
-Federal law- reduce fines when a violation occurs b/c of companies self-police conduct.
-Businesses perceived as ethical and acting responsible, attract loyal customers, employees and investors.

8

Sharing of moral values promotes

Social cooperation and is means of social control

9

Morals involve ...?

What we mean by our values of What is right and wrong

10

Ethics is....

A formal system deciding of right and wrong .... with a philosophical system that justifies and necessitates rules of conduct
-examine morals, what is right and wrong and why

11

End result of ethical examination...

Called: the good. It means being concerned about others. Moral goals and objectvies we pursue

12

How are laws and ethics similar and different?

Similar: rules to guide conduct, social cooperation
Differences: legal is state. It enforces rules by civil and criminal sanctions.
Many ethical values not enforced by state, many laws do not address ethical concerns.
-Ethical, to observe rule is from within.
To observe the law , comes from outside yourself in form of sanctions

13

An approach to ethics that affirms an absolute morality

Formalism- an act is right or wrong, always in every situation
-duty based view of ethics
-focused on worth of the individual (rights)
-ie Bill of Rights, Constitution

14

What is categorical imperative?

Immanuel Kant- to be ethical to act with good intent. To be ethical requires Consistently acting with good intent.
-emphasis on consistency, Kant called the categorical imperative.
-You cannot say I can lie but others should not do (lie) this to me.

15

What theory concerns itself with creating a just society given the many inequalities of wealth, knowledge, and social status?

Social Contract theory - first step, freeing ourselves of self-knowledge, John Rawls argues, improves our ability to evaluate the terms of a fair agreement ( contract) under which we enter society or join a corporation.
(origin in formalism)

16

Another principal system of ethics that concerns itself with the moral consequences of actions.

Consequentialism - ie. lying is not unethical, it is the consequences or end result of lying that must be evaluated for their ethical implications.
-Focuses on common good.
does this action improve common good?

17

The dominant form of consequentialism is...

utilitarianism - judges actions by usefulness, serve to increase the common good.
The ends justifies the means.

18

What form of business ethics are reflected mostly today?

consequentialism - need to produce a profit.

19

What is values-based management?

The emphasis is teaching ethical values to employees that enhance the profitability of the company.

20

What is protestant ethics?

-promoted individual, hard work, success, and planning, but ultimately without moral values.
-the modern bureaucratic managerial system.
-promoting independence fueled commercial growth and our modern consumer society.
-Robert Jackall identified the ethics becoming the bureaucratic managerial system, goal is profit.
-a type of utilitarian consequentialism.

21

Comparing the two ethical systems arriving to the same result

Formalism: test is, am I willing to permit others to act in this way?
Consequentialism: test is, Do the results promote the common good?

22

What are the 5 major ethical rules that can be drawn from the Law?

1. respect for the liberty and rights of others
2. the importance of acting in good faith (intent)
3. the importance of exercising due care
4. the importance of honoring confidentiality (harmful consequences balanced against effort to avoid harm. conseq.
5. avoidance of conflicts of interest (serve two masters)

23

What are professional codes of ethics?

ethical values that come from the development of group standards for ethical conduct. ie. marketing and accounting.
term is self-regulation

24

what is code of conduct?

a business's own code of ethics. can be detailed or short. -Has statements of shared ethical values
-sanctions for violation
-some are just a veneer to look good.

25

What are the four sources of values for business ethics.

1. Legal regulation
2. Professional codes of ethics
3. Organizational codes of ethics
4. Individual values

26

Five major ethical rules can be drawn from the law. These are:

-Respect for the liberty and rights of others. (privacy, equal employment opportunity, freedom of expression, due process of the law)
-The importance of acting in good faith. (intent)
-The importance of exercising due care. (torts - promotes common good, Harmful consequences balanced against effort to avoid harmful consequences)
-The importance of honoring confidentiality.
-Avoidance of conflicts of interest. (avoid serving 2 masters)

27

What are ethical values that come from the development of group standards for ethical conduct?

Professional codes of ethics.

28

The state will likely regulate professions if they do not do so themselves.. the terms is called?

self-regulation

29

what are some obstacles to ethical corporate behavior?

1. Emphasis on profit
2. Effect of the group - Just following orders
3. Control of resources by Nonowners

30

What are the steps to be taken to promote business ethics?

1. Involvement of Top management - how well an employee "fits in" with company management
2. Openness in Communication
2. consideration of All stakeholders (can be society)
Stakeholder theory maintains that ethical corp. behavior depends on mangers who take into account all stakeholders who are impacted. Stakeholder theory includes and goes beyond the responsibilities of corporate governance, which focuses on the legal responsibilities of the mangers to society and investor-owners of the corp.