Ethics
an individual's personal beliefs about whether a decision, behavior, or action is right or wrong
ethical behavior
behavior that conforms to generally accepted social norms
unethical behavior
behavior that does not conform to generally accepted social norms
Generalizations of Ethic and Social responsibility
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In Mexico, ________.
one in five children work
Ethics in Cross-Cultural and International Contexts
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How an Organization Treats its Employees
hiring and firing practices, wages and working conditions, and employee privacy and respect
How Employees Treat the Organization
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A ________________ occurs when a decision potentially benefits the individual to the possible detriment of the organization.
conflict of interest
In Japan, ________ gifts represent a token of gratitude for favors and loyalty shown throughout the year
oseibo
Japan has a high-context culture. Gift exchanges in a business situation are ________.
common and appropriate
Gift exchanges are likely to be considered a conflict of interest in a(n) ________ culture.
low-context
Employees, the Organization & Other Economic Agents
customers, competitors, stockholders, suppliers, dealers, and labor unions
Behavior of economic agents and the organization include:
advertising and promotions, financial disclosures, ordering and purchasing, shipping and solicitations, bargaining and negotiation
written guidelines
that detail how employees are to treat suppliers, customers, competitors, and other stakeholders
formal codes of ethics
written statements of the values and ethical standards that guide the firms' actions
Code of ethics must be backed up by
organizational practices and the company's corporate culture
In a survey on the acceptability of bribing officials when doing business in foreign countries that _____________ firms found bribery to be relatively acceptable
Russian, Chinese, Taiwanese and South Korea
In a survey on the acceptability of bribing officials when doing business in foreign countries that _____________ found bribery to be unacceptable
Australia, Sweden, Switzerland, Austria, and Canada
Corporate social responsibility (CSR)
is the set of obligations a corporation undertakes to protect and enhance the society in which it functions
the triple bottom line
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shareholder model
a firm's goal is to maximize the after-tax present discounted value of the profits flowing over time to shareholders
the stakeholder model
corporation has gained prominence, which has made the task of delivering value to shareholders even more complex
Primary Stakeholders
those individuals and organizations directly affected by the practices of the organization and that have an economic stake in its performance
primary stakeholders include
employees, customers, and investors
secondary stakeholders
are individuals or groups that may be affected by corporate decisions but are not directly engaged in economic transactions with the firm
secondary stakeholders include
news media, nongovernmental organizations (NGOs), or the community in which the firm operates
Most nations have laws striving to
protect and improve the quality of their waters, lands, and air
Companies need to develop economically feasible ways to
reduce acid rain and global warming; to avoid depleting the ozone layer; and to create alternative methods of handling sewage, hazardous wastes, and ordinary garbag
Examples of promoting general welfare of society
making contributions to charities, philanthropic organizations, and not-for-profit foundations and associations; supporting museums, symphonies, and public radio and television; and taking a role in improving public health and education
obstructionist stance
approach to social responsibility that involves doing as little as possible to address social or environmental problems
- least responsible approach to social responsibility
defensive stance
approach to social responsibility by which an organization will do everything that is required of it legally but nothing more
accommodative stance
approach to social responsibility by which a firm meets its legal and ethical requirements but may also go beyond these requirements in selected cases
proactive stance
approach to social responsibility by which a firm takes to heart the arguments in favor of social responsibility and views themselves as citizens in a society and proactively seek opportunities to contribute
- highest degree of social responsibility
Formal dimensions of social responsibility
Legal compliance
Ethical compliance
Philanthropic giving
Legal compliance
the extent to which the organization conforms to local, state, federal, and international laws
ethical compliance
the extent to which the members of the organization follow basic ethical (and legal) standards of behavior
philanthropic giving
the awarding of funds or gifts to charities or other social programs
Informal Dimensions of Social Responsibility
Leadership practices, organization culture, whistle blowing
Whistle-blowing
The disclosure of information by a company insider that exposes illegal or unethical behavior by others within the organization
An organization serious about social responsibility must
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corporate social audit
a formal and thorough analysis of the effectiveness of a firm's social performance
three main actors in the policy formulation process
the state
the market
the civil society
the state
passes and enforces laws
the market
utilizes inputs and allocates outputs to members of the society
civil society
includes churches, charitable organizations, labor unions, NGOs (nongovernmental organizations)
Anglo-Saxon Approach
view the state, the market, and civil society as separate, competitive, and antagonistic.
Asian Approach
Japan, Korea, China, and Indonesia come to mind�rely on close cooperation between the private sector and the government
Continental European Approach
in continental European countries such as Austria, Germany, France, and the Netherlands�the three actors have much more cooperative ways of working with one another
Foreign Corrupt Practices Act (FCPA)
prohibits U.S. firms (or their employees and agents) from bribing any foreign government official to influence his or her actions to gain or retain business
- passed by US Congress in 1977
Bribery Act
A 2010 British law that applies to transactions involving government officials and transactions between two businesses, and it outlaws facilitation payments
Alien Tort Claims Act
A 1789 law that U.S. multinationals may be responsible for human rights abuses by foreign governments, if the companies benefited from those abuses
Anti-Bribery Convention of the Organization for Economic Cooperation and Development
mandates jail time for those convicted of paying bribes
The International Labor Organization (ILO)
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