Key Terms
Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
What is Business Ethics?
Situation where the person is faced with multiple choices, all of which are undesirable as defined by the person
What is Moral dilemma?
Firms asked to take steps to protect the environment, contribute to social causes, and engage in responsible and ethical conduct
What development took place in the 2020s and beyond?
It requires corporate governance, compliance programs, risk management, and voluntary activities to maintain and manage stakeholder expectations
What is Ethical Culture?
Research shows that a company’s reputation for ethical behavior leads to this benefit, as buyers prefer to support organizations they perceive as socially responsible and honest.
What is Customer Satisfaction (or Customer Trust)?
Specific and pervasive boundaries for behavior that should not be violated
Often become the basis for rules (human rights, freedom of speech).
What are principles?
Help you begin to understand how to cope with conflicts between your own personal values and those of the organization in which you work
Why Study Business Ethics, Question #2?
The European Union (EU) passed the General Data Protection Regulation (GDPR) in 2016, requiring businesses to ask consumers for permission to collect data.
What development took place in the 2010s and beyond?
A global compliance management standard that addresses risks, legal requirements, and stakeholder needs.
What is ISO 37301 (international standard)?
This benefit occurs when employees perceive their company as having an ethical culture, leading to higher job satisfaction, lower turnover, and a greater desire to stay with the firm.
What is Employee Commitment (or Trust)?
Enduring beliefs and ideals that are socially enforced
What are Values?
Moral dilemma where the individual’s beliefs are grounded in societal norms
What is Value Dilemma?
Far-reaching law that made securities fraud a criminal offense and stiffened penalties for corporate fraud, created a corporate accounting oversight board, and required executives to sign off on their firms’ financial reports
What is the Sarbanes-Oxley Act (SOX)?
Set of 10 principles concerning human rights, labor, environment, and anti-corruption
Purpose is to create openness and alignment among business, government, society, labor, and the United Nations
What is the Global Compact?
Ferrell highlights that ethical companies tend to outperform their peers in this specific financial category because ethics drives employee productivity, investor trust, and customer retention.
What is Profit (or Financial Performance)?
Behavior or decisions made within a group’s values or morals
What are Ethics?
Help you begin to identify ethical issues when they arise and recognize the approaches available for resolving them
Why Study Business Ethics, Question #2?
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
What is Federal Sentencing Guidelines for Organizations (FSGO)?
This is an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions in a global environment, often leading to ethical misunderstandings.
What is the Self-Reference Criterion (SRC)
Investors are increasingly looking at this specific cultural aspect of a firm, believing it provides a foundation for efficiency, productivity, and long-term financial stability while reducing the risk of costly scandals.
What is Investor Loyalty (or Trust)?
Set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share
Within this culture, rules and regulations, written and unwritten decisions that employees consider right or wrong
What is Corporate Culture?
Decisions in various fields are often judged as ethical or unethical, and societal judgment can lead to new legislation
Recognizing ethical issues is crucial for businesses to navigate societal expectations and avoid negative consequences
What are 2 Specific Issues with Business Ethics?
It supports codes of conduct and their widespread distribution
Member companies are expected to provide ethics training
internal reporting and voluntary disclosure plans
Name 3 of the 6 Defense Industry Initiative on Business Ethics and Conduct (1980).
This U.S. law prohibits American companies and their subsidiaries from paying bribes to foreign government officials to obtain or retain business.
What is the Foreign Corrupt Practices Act (FCPA)?
This "intangible asset" is described by Ferrell as the sum of a company's relationships with its stakeholders; it can be destroyed overnight by an ethical lapse but creates a competitive advantage when maintained.
What is Corporate Reputation?