definition of business ethics
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.
FSGO
Federal Sentencineg Guidelines for Organizations - approved by congress in 1991, set the tone for organizational ethical compliance programs ( 7 steps for effective ethical compliance)
Sarbanes-Oxley Act
most far-reaching change in organizational control and accounting regulations since the Securities and Exchange Act of 1934. Made securities fraud a criminal offenses and stiffened penalties for corporate fraud. created new oversight board that requires c
stakeholders
customers, shareholders, employees, suppliers, govt agencies, communities, and many others who have a "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes.
Integrity
one of the most important and oft-cited elements of virtue, and refers to being whole, sound, and in an unimpaired condition. Relates to product quality, open communication, transparency, and relationships.
Honesty
refers to truthfullness or trustworthiness. to be honest is to
Fairness
quality of being just, equitable, and impartial. 3 main motivations to be fair - equality, reciprocity, and optimization.
ethical issue vs ethical dilemma
ethical issue is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical. Ethical dilemma is problem, situation or opportunity
moral philosophy
refers to the specific principles or values people use to decide what is right and wrong. These are person-specific where business ethics is decided by groups
Egoism
defines right or acceptable behavior in terms of its consequences for the individual. Egoists believe they should make decisions that maximize their own self-interest, which is defined differently by each individual.
Utilitarianism
concerned with consequences and seeks greatest good for the greatest number of people. Rule - determine behavior on the basis of principles or rules designed to promote the greatest utility rather than on individual examinations of each situation they enc
Relativist
From this perspective definitions of ethical behavior are derived subjectively from the experiences of individuals and groups. Descriptive relativism relates to observations of cultures. Meta-ethical relativism proposes that people naturally see situation
Virtue ethics
Argues ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person w a "good" moral character would deem appropriate in a given situation.
transactional/tranformational
Transactional leaders attempt to create employee satisfaction through negotiating or "bartering," for desired behaviors or levels of performance. Transformational leaders strive to raise employees' level of commitment and foster trust and motivation.
habits of strong ethical leaders
one who does well for the stakeholders of the corporation, consistency is important
different types of power
reward, coercive, legitimate, expert, referent
mission statements
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ethical issue intensity
relevance or importance to the decision or decision in the eyes of the individual, work group, and/or organization
moral intensity
relates to individuals' perceptions of social pressure and the harm they believe their decisions will have on others
locus of control
-relates to individual differences in relation to a generalized belief about how you are affected by internal versus external events or reinforcements
-the concept relates to how people view themselves in relation to power
external control
those who believe in this see themselves as going with the flow because that is all they can do; uncontrollable forces in life
internal control
those who believe in this believe that they control the events in their lives by their own effort and skills; masters of their destinies; trust their capacity to influence their environment
corporate culture
set of values, norms, and artifacts including ways of solving problems that members of an organization share
ethical culture
reflects the integrity of decisions made and is a function if many factors, including corporate policies, top management's leadership on ethical issues, the influence of co-workers, and the opportunity for unethical behavior
significant others
those who have an influence in a work group, including peers, managers, coworkers, and subordinates
obedience to authority
another aspect of the influence significant others can exercise; helps explain why many employees resolve business ethics issues by simply following the directives of a superior
opportunity
describes the conditions in an organization that limit or permit ethical or unethical behavior; results from conditions that either provide rewards, whether internal or external, or fail to erect barriers against unethical behaviors
immediate job context
individuals' opportunity relates to this- where they work, whom they work with, and the nature of the work
normative approach
how organizational decision makers should approach an issue; the ideal standard
Sarbanes-Oxley 404
Requires firms to adopt a set of values that forms a portion of the company's culture. This section includes a requirement that management assess the effectiveness of the organization's internal controls and commision an audit of these controls by an exte
caring culture
high concern for people
low concern for performance
apathetic culture
low concern for people
low concern for performance
exacting culture
low concern for people
high concern for performance
integrative culture
high concern for people
high concern for performance
ethical awareness
-ability to perceive whether a situation or decision has an ethical dimension
culture audit
-assessment of an organization's values
-usually conducted by outside consultants
compliance culture
Tha accounting professional model of rules created a ____________________ organized around risk. These use a legalistic approach to ethics. They use laws and regulatory rules to create codes and requirements.
differential association
How an organization is different from how they made it appear
whistle-blowing
exposing an employer's wrong-doing to outsiders such as the media or govt regulatory agencies
reward power
refers to a person's ability to influence the behavior of others by offering them something desirable (ie money, status, promotion)
value-based ethics culture
This approach to ethical corporate cultures relies upon an explicit mission statement that defines the core values of the firm and how customers and employees might be treated
coercive power
essentially the opposite of reward power. Instead of rewarding a person for doing something, coercive power penalizes actions or behaviors.
legitimate power
stems from the belief that a certain person has the right to exert influence and certain others have an obligation to accept it.
expert power
derived from a person's knowledge (or perception that a person possesses knowledge)
motivation
is a force within the individual that focuses his or her behavior toward achieving a goal
job performance
is considered to be a function of ability and motivation and can be represented by the equation job performance = ability X motivation
related needs
satisfied by social and interpersonal relationships
growth needs
satisfied by creative or productive activities
centralized organization
in this, decision-making authority is concentrated in the hands of top=level managers, and little authority is delegated to lower levels.
decentralized organization
decision-making authority is delegated as far down the chain of command as possible
formal group
committees - formal group of individuals assigned to a specific task.
work groups - used to subdivide duties within specific functional areas of a company.
teams - bring together the expertise of employees from several different areas of and organization
informal group
composed of individuals, often from the same department, who have similar interests and band together for companionship or for purposes that may or may not be relevant to the goals of the organization.
group norm
standards of behavior groups expect of their members. Just as corporate culture establishes behavior for an organization's members, this defines acceptable and unacceptable behavior within a group.
compliance orientation
creates order by requiring employees to identify with and commit to specific required conduct. Uses legal terms, statuses, and contracts that teach employees the rules and penalties for noncompliance.
values orientation
strives to develop shared values
codes of conduct
formal statements that describe what an organization expects of its employees (code of ethics, code of conduct, and statement of values)
Code of ethics
most comprehensive and consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conduct. generally specifies methods for reporting violations, disciplinary action for violations, and str
Statement of values
serves the general public and also addresses distinct groups such as stakeholders.
ethics officers
high-ranking persons known to respect legal and ethical standards responsible for 1) assessing the needs/risks an organization-wide ethics program must address 2) developing and distributing a code of conduct or ethics 3) conducting training programs for
Ethical Awareness
The ability to perceive whether a situation or decision has an ethical dimension
gender
In many aspects there are no differences between men and women when it comes to this and ethical decision making; women tend to rely on relationships, men tend to rely on justice and equity.
education
does not reflect experience but generally, the more of this and work experience that a person has, the better they are at making ethical decisions
nationality
the legal relationship between a person and the country in which he or she is born; because of cultural differences cannot state that ethical decison making will differ significatly among indivisuals of different nationalities
age
complex relationship with ethics and age
cultural audit
an assessment of an organization's values
referent power
may exist when one person perceives that his or her goals or objectives are similar to another's. The second person may attempt to influence the first to take actions that allow both to achieve their objectives. Because they share the same goals, the firs
relatedness needs
satisfied by social and interpersonal relationships
statement of values
type of ethical statement thats serves the general public and also addresses distinct groups such as stakeholders