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Dr. MatherlyMAN4701STUDY GUIDE 2SPRING 2013Business & SocietyEXAM 1 CHAPTER 4- Ethics : is a conception of right and wrong conduct. It tells us whether our behavior is moral or immoral and deals with fundamental human relationships- how we think behave toward others and how we want them to think and behave toward us. o Ethical principles : are guides to moral behavior. o Business ethics : is the application of general ethical ideas to business behavior. - Arguments in favor of being ethical in business: o Meet Demands of Business Stakeholders : some businesses know that meeting stakeholder’s expectations is good business. When a company upholds ethical standards, consumers may conduct more business with the firm and the stockholders may benefit as well. o Enhance Business Performance : whether at the organizational or individual level, businesses increasingly are recognizing that ethics pay and are encouraging ethical behavior through rewards program and other incentives or accommodations. Business executives recognize that ethical actions can directly affect their organization’s bottom line, and have chosen to reward accordingly. o Comply with Legal Requirements : doing business ethically is also often a legal requirement. Two legal requirements, in particular, provide direction for companies interested in being more ethical in their business operations. Although they apply only to U.S.-based firms, these legal requirements also provide a model for firms that operate outside the United States.  U.S. Corporate Sentencing Guidelines : which provide a strong incentive for businesses to promote ethics at work. The sentencing guidelines come into play when an employee of a firm has been found guilty of criminal wrongdoing and the firm is facing sentencing for the criminal act, since the firm is responsible foractions taken by its employees.  Sarbanes-Oxley Act : this law seeks to ensure that firms maintain high ethical standards in how they conduct and monitor business operations. o Prevent or Minimize Harm: businesses and their employees should act ethically to prevent harm to the general public and the corporation’s many stakeholders.Dr. MatherlyMAN4701STUDY GUIDE 2SPRING 2013o Promote Personal Morality : most people want to act in ways that are consistent with their own sense of right and wrong. Knowing that one works in a supportive ethical climate contributes to one’s sense of psychological security. - Reasons why Ethical Problems Occur: o Personal Gain and Selfish Interest: desire for personal gain, or even greed, causes some ethical problems. Businesses sometimes employ people whose personal value are less than desirable, who will put their own welfare ahead of all others, regardless of the harm done to other employees, the company, or society. o Competitive Pressures on Profits: when companies are squeezed by tough competition,they sometimes engage in unethical activities to protect their profits. Intense competitive pressure in the global marketplace has resulted in unethical activity, such asthe practice of price fixing. o Conflicts of Interest: a conflict of interest occurs when an individual’s self-interest conflicts with acting in the best interest of another, when the individual has an obligation to do so. o Cross-Cultural Contradictions: some of the knottiest ethical problems occur as corporations do business in other societies where ethical standards differ from those at home. - Analyzing Ethical Problems in Business: o Virtue Ethics: Pursuing a “Good Life”:  Virtue ethics focuses on character traits that a good person should possess, theorizing that moral values will direct the person toward good behavior. Virtue ethics is based on a way of being and on valuable characteristics rather than on rules for correct behavior. o Utility: Comparing Benefits and Costs:  Utility is the overall amount of good that can be produced by an action or a decision. Utilitarian reasoning is often referred to as cost-benefit analysis because it compares the costs and benefits of a decision, a policy, or an action. o Rights: Determining and Protecting Entitlements : Human rights are another basis for making ethical judgments. A right means that a person or a group is entitled to something or is entitled to be treated in a certain way. The most basic human rights are the rights to life, safety, free speech, freedom, being informed, due process, and property.o Justice: Is It Fair ? Justice, or fairness exists when benefits and burdens are distributed equitably and according to some accepted rule. For society as a whole, social justice means that a society’s income and wealth are distributed among the people in fair proportions. CHAPTER 5Dr. MatherlyMAN4701STUDY GUIDE 2SPRING 2013- Making Ethics Work in Corporations: o Building Ethical Safegaurds into the company: managers and employees need guidanceon how to handle day-to-day ethical situations; their own personal ethical compass may be working well, but they need to receive directional signals from the company. Top Management Commitment and Involvement: Research has consistently shown that the tone at the top- the example set by top executives- is critical to fostering ethical behavior. When senior-level managers and directors signal employees, through their own behavior, that they believe ethics should receive high priority in all business decisions, they have taken a giant step toward improving ethical performance throughout the company.  Ethics Policies or Codes: a written set of rules used to guide managers and employees when they encounter an ethical dilemma.  Ethics and Compliance Offers : a manager designated by an organization to investigate breaches of ethical conduct, promulgate ethics statements, and generally promote ethical conduct at work.  Ethics Reporting Mechanisms : a program that enables employees, customers orsuppliers to report an ethical concern directly to someone in authority in an organization. Ethics Training Programs: programs developed by businesses to further reinforce their ethical expectations for their employees.  Ethics Audits: an assessment used ny an organization to target the effectivenessof their ethical safeguards or to document evidence of increased ethical employee behavior. CHAPTER 8- Public Policy: is a plan of action undertaken by government officials to achieve some


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FSU MAN 4701 - EXAM 1

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