Business ethics
the principles, values, and standards that guide behavior in the world of business
Caux Round table
A group of business, political leaders, and concerned interest groups that desire responsible behavior in the global community
Consumers' Bill of Rights
introduction in 1962, outlined four basic consumer rights: the right to safety, the right to be informed;the right to choose; and the right to be heard
Defense Industry Initiative on Business Ethics and Conduct (DII)
established a method for discussing best practices and working tactics to link organizational practice and policy to successful ethical compliance
Ethical culture
the character or decision-making process that employees use to determine whether their responses to ethical issues are right or wrong
Federal Sentencing Guidelines for Organizations (FSGO)
codified into law, incentives to reward organizations for taking action to prevent misconduct
Principles
specific and pervasive boundaries for behavior that are universal and absolute
Sarbanes-Oxley Act
law that made securities fraud a criminal offense and stiffened penalties for corporate fraud; created an accounting oversight board that requires corporations to establish codes of ethics for financial reporting and to develop greater transparency in fin
social responsibility
an organization's obligation to maximize its positive impact on stakeholders and to minimize its negative impact
corporate citizenship
the extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by their various stakeholders
corporate governance
formal systems of accountability, oversight, and control within an organization
executive compensation
means by which executives are rewarded for their leadership, organizational service, and performance
primary stakeholder
individuals or groups whose continued association is absolutely necessary for a firm's survival, including employees, customers, investors, and shareholders, as well as the governments and communities that provide necessary infrastructure
reputation
one of an organziation's greatest intangible assets with tangible value; influenced by its actions, choices, behaviors, and consequence
secondary stakeholder
individuals or groups that do not typically engage in transactions with a company and thus are not essential for its survival, including the media, trade associations, and special-interest groups
shareholder model of corporate governance
focuses on developing and improving the formal system for maintaining performance accountability between top management and the firms' shareholders
social responsibility
business ethics that embody values, norms, and expectations that reflect a concern of major stakeholders, including consumers, employees, shareholders, suppliers, competitors, and the community
stakeholder
customers, investors and shareholders, employees, suppliers, government agencies, communities, and many others who have a "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes
stakeholder interaction model
a conceptualization of the relationship between businesses and stakeholders featuring two-way relationships between the firm and a host of stakeholders
stakeholder model of corporate governance
entails creating governance systems that consider stakeholder welfare in tandem with corporate needs and interest
stakeholder orientation
the degree to which a firm understands and addresses stakeholder demands
abusive/intimidating behavior
can include physical threats, false accusations, being annoying, profanity, insults, yelling, harshness, ignoring someone, and unreasonableness
accounting fraud
manipulation or falsification of a corporation's financial reports providing important information on which investors and others base decisions that may involve millions of dollars
active bribery
when the person who promises or gives the bribe commits the offense
Adam Smith
Eighteenth-century British professor whose writings formed the basis of modern economics; observed and wrote about supply and demand, contractual efficiency, and division of labor; published The Theory of Moral Sentiments and the Inquiry into the Nature a
affirmative action program
efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics
Age Discrimination in Employment Act
outlaws hiring practices that discriminate against people between the ages of 49 and 69, as well as those that require employees to retire before the age of 70
bribery
the practice of offering something (usually money) in order to gain an illicit advantage
bullying
behavior associated with a hostile workplace where an individual or a group considered a target is threatened, harassed, belittled, or verbally abused or overly criticized
Collateralized debt obligations (CDOs)
a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets
conflict of interest
when an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group
consumer fraud
when consumers attempt to deceive businesses for their own gain
Corporate Fraud Accountability Act
Title VIII of the Sarbanes-Oxley act that consists of seven sections and is also referred to as the "Corporate and Criminal Fraud Act of 2002"; describes specific criminal penalties for manipulation, destruction or alteration of financial record
corporate intelligence
the collection and analysis of information on markets, technologies, customers, and competitors, as well as on socioeconomic and external political trends
derivatives
a financial instrument that is derived from some other asset, index, event, value or condition (known as the underlying); rather than trade or exchange the underlying itself, derivative traders enter into an agreement to exchange cash or assets over time
discrimination
refusing to hire an individual, maintaining a system of employment that unreasonably excludes an individual from employment, discharging an individual, or discriminating against an individual with respect to hiring, employment terms, promotion, or privile
dual relationship
a personal, loving, and/or sexual relationship with someone with whom one shares professional responsibilities
dumpster diving
searching trash that has been discarded onto a public street or alley for trade secrets
environmental issues
include global warming, water pollution, and waste management
Equal Employment Opportunity Commission
enforces all federal laws prohibiting job discrimination and provides oversight and coordination of all federal equal employment opportunity regulations, practices, and policies
equality
how wealth or income is distributed between employees within a company, a country, or across the globe
ethical dilemma
a problem, situation, or opportunity that requires an individual, group, or organization to choose among several wrong or unethical actions
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
facilitation payment
payment made to obtain or retain business or other improper advantages
fairness
the quality of being just, equitable, and impartial
Federal Sentencing Guidelines
codified into law, incentives to reward organizations for taking action to prevent misconduct
fraud
any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression
Futures contracts
standardized contracts to buy or sell a specified commodity of standardized quality at a certain date in the future, at a market determined price (the futures price)
green energy
perceived to lower carbon emissions and create less pollution; sources include anaerobic digestion or biomass, geothermal, wind, small-scale hydropower, solar, and tidal power
hacking
an attempt to penetrate a system to capture data, user names, and passwords
honesty
truthfulness or trustworthiness
hostile work environment
work environment that meets the following criteria: unwelcome conduct; conduct that is severe, pervasive, and regarded by the claimant as so hostile or offensive as to alter his or her conditions of employment; and conduct such that a reasonable person wo
implied falsity
a message that has a tendency to mislead, confuse, or deceive the public
insider trading
buying or selling of company stocks by insiders; illegal insider trading involves the buying or selling of stocks by insiders who possess material that is still not public, whereas legal insider trading involves legally buying and selling stock by insider
integrity
uncompromising adherence to ethical values
intellectual-property right
the legal protection of intellectual properties such as music, books, and movies
Kyoto Protocol
an international treaty on climate change committed to reducing emissions of carbon dioxide and five other greenhouse gases and to engaging in emissions trading
labeling issue
a type of advertising abuse in the form of claims that misrepresent the features or properties of a product or service
literally false
advertising claims that belong to one of two subcategories: tests prove (establishment claims), in which the advertisement cites a study or test that establishes the claim; and bald assertions (non-establishment claims), in which the advertisement makes a
lying
dishonest behavior that can take one of three forms: (1) statements that cause damage or harm; (2) a "white lie," which doesn't cause damage but can be called an excuse or something told to benefit someone else; and (3) statements that are obviously meant
marketing fraud
the process of creating, distributing, promoting, and pricing products
Milton Friedman
economist whose ideas were guiding principles for government policy making in the U.S., and increasingly throughout the world, starting in the second half of the 20th century; believed in deregulation and that the system could reach equilibrium without go
optimization
the trade-off between equity (equality or fairness) and efficiency (maximum productivity)
passive bribery
an offense committed by the official who receives the bribe; not an offense, however, if the advantage was permitted or required by the written law or regulation of the foreign public official's country, including case law
password guessing
using personal information�such as a child's name, birthdays and anniversaries, and Social Security numbers�to guess a password
phone eavesdropping
using a digital recording device to monitor and record a fax line
physical hacking
requires that the hacker enter a facility personally to capture data, user names, and passwords
ponzi scheme
a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned; usually offers returns that other investments cannot guarantee in order to ent
privacy issue
issues that businesses must address include the monitoring of employees' use of available technology and consumer privacy
puffery
exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely and is not actionable under the Lanham Act
reciprocity
an interchange of giving and receiving in social relationships
remote hacking
involves attempting to penetrate remotely a system across the Internet
Securities and Exchange Commission (SEC
an independent agency of the United States government which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets
curities Investor Protection Corporation (SIPC)
a federally mandated non-profit corporation in the United States that protects securities investors from financial harm if a broker-dealer company fails
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 sex
shoulder surfing
looking over an employee's shoulder while he or she types in a password
slamming
changing a customer's phone service without authorization
social engineering
the tricking of individuals into revealing their passwords or other valuable corporate information
system hacking
assumes that the attacker already has access to a low-level, privileged-user account
unethical dual relationship
a relationship that causes either a direct or indirect conflict of interest or a risk of impairment to professional judgment.
water pollution
result of the dumping of raw sewage and toxic chemicals into rivers and oceans, from oil and gasoline spills, and from the burial of industrial wastes in the ground where they may filter into underground water supplies
whacking
wireless hacking
Better Business Bureau
a leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases
civil law
a leading self-regulatory body that provides directions for managing customer disputes and reviews advertising cases
consumer protection law
laws protecting consumers that require businesses to provide accurate information about products and services and to follow safety standards
core practices
laws protecting consumers that require businesses to provide accurate information about products and services and to follow safety standards
criminal law
not only prohibits specific actions�such as fraud, theft, or securities trading violations�but also imposes fines or imprisonment as punishment for breaking the law
Environmental Protection Agency
created in 1970 to coordinate environmental agencies involved in enforcing the nation's environmental laws; the major area of environmental concern relates to air, water, and land pollution
mandated boundaries
externally imposed boundaries of conduct, such as laws, rules, regulations, and other requirements
Occupational Safety and Health Administration
enforces the Occupational Safety and Health Act of 1970, which mandates that employers provide safe and healthy working conditions for all workers; makes regular surprise inspections to ensure that businesses maintain safe working environments
philanthropy
giving back to communities and causes
procompetitive legislation
laws passed to prevent the establishment of monopolies, inequitable pricing practices, and other practices that reduce or restrict competition among businesses; enacted to encourage competition and prevent activities that restrain trade
Public Company Accounting Oversight Board
monitors accounting firms that audit public corporations and establishes standards and rules for auditors in accounting firms
strategic philanthropy
the synergistic and mutually beneficial use of an organization's core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits
voluntary practices
the beliefs, values, and voluntary contractual obligations of an organization