Chapter 3 - Business Ethics

Integrity

Being
whole, sound, and in an unimpaired
condition.
Relates to
all
business activities. Relates to product quality, open communication, transparency, and relationships.
Uncompromising adherence to a set of values.

Honesty

Truthfulness or trustworthiness.
Ren - one who has humanity.
Yi - what we should do according to our relationships with others
li - virtue of good manners or respect
Zhi - whether a person knows what to say and what to do as it relates to the honesty conc

Fairness

The quality of being
just, equitable, and impartial.
Overlaps with the concepts of
justice, equity, equality, and morality.

Three Elements of Fairness

1) Equality
2) Reciprocity
3) Optimization

Equality

The distribution of benefits and resources.

Reciprocity

An interchange of
giving and receiving
in social relationships.
Occurs when an action that has an effect upon another is returned with an action that has an
approximately equal effect.

Optimization

The trade-off between
equity (equality) and efficiency (maximum productivity).

Ethical Issue

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

A problem, situation, or opportunity that requires an individual to choose among several actions that have
negative consequences.

Misuse of Company Time and Resources

Major form of
observed misconduct
in organizations
Using company software or other resources for
personal business

Abusive Behavior (Intimidating Behavior)

Physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, ignoring someone, unreasonableness, etc.

Commission Lying

Creating a perception or belief by words that intentionally deceive the receiver of the message
Creating
noise (technical jargon
) that the receiver does not understand

Omission Lying

Intentionally
not
informing others of any differences, problems, safety warnings, or negative issues relating to the product or company that significantly affect awareness, intention, or behavior.

Conflict of Interest

Exists when an individual must choose whether to advance his or her
own interests, those of the organization, or those of some other group.
To avoid ______, employees must be able to
separate their private interests from their business dealings.

Bribery

The practice of offering something (often money) in order to gain an illicit advantage from someone in authority.

Active Bribery

The person who promises or gives the bribe
commits the offense.

Passive Bribery

An offense committed by the official who
receives
the bribe.

Facilitation Payments

Made to obtain or retain business or other improper advantages
do NOT constitute bribery payments
for U.S. companies in some situations.

Corporate Intelligence (CI)

The collection and analysis of information on markets, technologies, customers, and competitors, as well as socioeconomic and external political trends.
Involves an in-depth discovery of information from corporate records, court documents, regulatory fili

Hacking

One of the
top three
methods for
obtaining trade secrets.

System Hacking

Assumes the attacker already has
access
to a low-level,
privileged-user
account.

Remote Hacking

Involves attempting to
remotely penetrate a system
across the Internet.
Begins with
no
special privileges and tries to obtain a
higher
level of administrative access.

Social Engineering

The
tricking
of individuals into revealing their passwords or other valuable corporate information.
Tactics include casual conversations with relatives of company executives and sending e-mails claiming to be a system administrator.

Shoulder Surfing

Someone simply
looks over
an employee's shoulder while he or she types in a password.

Password Guessing

Finding out a
personal thing
about someone and using that information to
guess a password.

Dumpster Diving

Going through someone's
garbage
in an attempt to find
personal information
or acquire *trade secrets.

Whacking

W
ireless
hacking

Phone Eavesdropping

Using a digital recording device to monitor and record a fax line.

Discrimination

Race, color, religion, sex, marital status, sexual orientation, public assistance status, disability, age, national origin, or veteran status

Equal Employment Opportunity Commission (EEOC)

Organization that handles charges of discrimination, especially in regards to
hiring, employment terms, promotion, or privileges of employment
as they relate to the definition of discrimination.
More than 99,000 charges of discrimination were filed in 201

Age Discrimination in Employment Act

Specifically outlaws hiring practices that discriminate against people
40 years of age or older
, as well as those that require employees to
retire before the age of 70.
Prohibits employers with
20 or more employees
from making employment decisions, inclu

Affirmative Action Programs

Involves efforts to
recruit, hire, train, and promote qualified individuals
from groups that have
traditionally been discriminated against on the basis of race.

Sexual Harassment

Any repeated, unwanted behavior of a
sexual nature
perpetrated upon one individual by another.
May be
verbal, visual, written, or physical
and can occur between people of different genders or those of the same gender.
Includes
unwanted sexual approaches (

Three Elements of a Hostile Work Environment

1) Conduct was unwelcome
2) Conduct was severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment.
3) Conduct was such that a
reasonable person
would find it hostile or offensive.
Decisive i

Dual Relationship

A
personal, loving, and or sexual relationship
with someone with whom you
share professional responsibilities.

Unethical Dual Relationship

The relationship could potentially cause a
direct or indirect conflict of interest
or a risk of
impairment to professional judgment.

Fraud

Any purposeful communication that
deceives, manipulates, or conceals facts
in order to
harm others.

Accounting Fraud

Involves a corporation's
financial reports
, in which companies provide important information on which investors and other base decisions involving millions of dollars.
The documents contain
inaccurate information

Marketing Fraud

The process of
dishonestly creating, distributing, promoting, and pricing products.
Destroys customer trust
in a company.

Puffery

Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely and is
not
actionable under the Lanham Act.

Implied Falsity

The message has a tendency to
mislead, confuse, or deceive
the public.

Literally False

Two subcategories:
Tests prove
(establishment claims) - when the advertisement
cites
a study or test
Bald assertions
(nonestablishment claims) - when the advertisement makes a claim that
cannot be substantiated

Weasel Words

Ambiguous statements or weak claims from which viewers must
infer
a message.

Labeling Issues

Changing a label to
change customer perception about a product.
Ex. Monster Energy Drink changed label to
beverage
instead of
supplement
.

Consumer Fraud

Occurs when
consumers attempt to deceive business
for their own gain.
Ex.
Shoplifting
, Price tag switching, item switching, lying to obtain age-related and other discounts, etc.
Intentional deception to derive an unfair economic advantage
by an individua

Collusion

Involves an employee who
assists the customer
with fraud.

Duplicity

A consumer
staging an accident
in a grocery store and then seeking damages against the store for its lack of attention to safety.

Guile

A person who is
crafty or understands right/wrong
behavior but uses
tricks to obtain an unfair advantage
.

Financial Misconduct

The failure to understand and manage
ethical risks,
or to take
appropriate responsibility
for a decision to utilize
risky and complex financial instruments
.

Insider

Any
officer, director, or owner
of
10 percent or more
of a class of a company's securities.

Illegal Insider Trading

The buying or selling of stocks by insiders who
possess information
that is
not yet public.

Legal Insider Trading

Legally buying and selling stocks in an insider's own company, but not all the time.
Insiders are required to report their insider transactions within
two business days
of the date the transaction occurred.
Insiders are prevented from buying and selling t

Intellectual Property Rights

Involve the
legal protection of intellectual property
such as music, books, and movies.

Privacy Issues

Monitoring of employees' use of available technology and consumer privacy.