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47 Cards in this Set
- Front
- Back
Managerial Ethics |
The study of morality and standards of business conduct |
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Ethical Dilemma |
Having to make a choice between two competing but arguably valid options.
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Ethical Lapse |
Decision that is contrary to an individual's stated beliefs and policies of the company. |
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Ethnocentricity |
The view that your perspective is correct and the views of people of other cultures are inferior. |
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Basic Approaches to Ethical Decision Making
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1. Utilitarian 2. Moral Rights 3. Universalism 4. Justice |
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The Utilitarian Approach |
Focuses on the consequences of an action; You try to make decisions that result in the "greatest good." |
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The Moral Rights Approach
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Focuses on examination of the moral standing of actions independent of their consequences; Some things are just "right" or "wrong" independent of consequences; from two courses of action, choose the one that conforms with moral principles and provides and positive consequences |
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The Universal Approach |
Choosing a course of action that you believe can apply to all people under all situations; "do unto others as you would have them do unto everyone, including yourself. " |
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The Justice Approach |
Focuses on how equitably the costs and benefits of actions are distributed; In general costs and benefits should be equitably distributed, rules should be impartially applied, and those damaged because of inequity or discrimination should be compensated 3 types: 1. Distributive 2. Procedural 3. Compensatory |
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Distributive Justice |
The equitable distribution of rewards and punishment based on performance. |
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Procedural Justice |
Ensuring that those affected by managerial decisions consent to the decision-making process and that the process is administered impartially. |
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Compensatory Justice |
If distributive and procedural justice fail, those hurt by the inequitable distribution of rewards are compensated; affirmative action |
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Interpersonal Justice |
Focuses on the polite and respectful treatment of people. |
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Informational Justice |
Focuses on on the timely communication or reasonableness of explanations of organizational actions. |
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Moral Intensity |
Is the degree to which people see an issue as an ethical one.
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Magnitude of Consequences |
The anticipated level of impact of the outcome of a given action, which is independent of whether the consequences are positive or negative. |
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Social Consensus |
The extent to which members of a society agree that an act is either good or bad
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Probability of Effect |
The moral intensity of an issue rises and falls depending on how likely people think the consequences are. |
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Temporal Immediacy |
A function of the interval between the time an action occurs and the onset of its consequences. |
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Proximity |
The physical, psychological, and emotional closeness the decision maker feels to those affected by the decision. |
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Concentration of Effect |
The extent to which consequences are focused on a few individuals or dispersed across many. |
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Moral Intensity Framework |
Can be used to anticipate the moral intensity of an issue and to diagnose the reasons for differing views people have about that intensity. 6 components: 1. Magnitude of consequences 2. Social consensus 3. Probability of effect 5. Proximity 6. Concentration of effect |
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Efficiency Perspective |
The concept that a manager's responsibility is to maximize profits for the owners of the business. |
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Externality |
An indirect or unintended consequence imposed on society that may not be understood or anticipated. Consumers cannot factor in the true costs and may not be willing to pay for them even when externalities can be anticipated. |
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Social Responsibility Perspective |
Argues that society grants existence to firms(such as through limited liability for corporations), that firms have responsibilities to society as a whole, and that it is socially irresponsible to only maximize shareholder wealth. |
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Stakeholder |
An individual or group who has an interest in and is affected by the actions of an organization; Includes shareholders, customers, employees, financiers, suppliers, the media, the communities in which the business operates, and society at large. |
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Concerns with Social Responsibility Perspective |
One of the key concerns is that important terms such as reasonable return and legitimate returns cannot be defined adequately given that reasonable returns of shareholders and legitimate concerns of other stakeholders may conflict. |
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Comparing the Efficiency and Stakeholder perspectives |
Actions that benefit shareholders, but harm the other stakeholders would be viewed as managerially responsible from the efficiency perspective, but managerially irresponsible from the social responsibility perspective and vice versa if things were flipped around. |
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How Corporations Respond to Stakeholder Perspectives |
1. Defenders 2. Accommodaters 3. Reactors 4. Anticipators |
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Defenders |
Tend to fight efforts that they see as resulting in greater restriction and regulation of their ability to maximize their profits. |
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Accommodaters |
Are less aggressive with fighting restrictions and regulations, but they too change only when legally compelled to do so. |
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Reactors |
Make changes when they feel the pressure from constituencies is sufficient such that nonresponsiveness could have a negative economic impact on the firm. |
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Anticipators |
Tend to believe they are obligated not to harm a variety of stakeholders independent of laws or pressures that restrict or regulate their actions; take action to avoid harming constituencies even when the constituencies might not be aware of the potential danger. |
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Strategic Corporate Social Responsibility Perspective |
A three criteria model that can help managers focus on social areas where there is the highest possibility of created shared value for the business and society. 3 Criterion: 1. Inside-out approach 2. Outside-in approach 3. Outside-out approach |
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A code of ethical conduct |
A formal settlement that outlines types of behavior that are and are not acceptable; typically a formal 1-3 page statement |
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Whistle Blower |
An employee who discloses illegal or unethical conduct on the part of others in the organization. |
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Foreign Corrupt Practices Act (FCPA) |
A law prohibiting employees of U.S. firms from corrupting the actions of foreign officials, politicians, or candidates for office.
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The Manager |
As a manager, take personal responsibility for your decisions so that they align with your ethical framework. If you adopt an ethical approach, apply it consistently. |
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Inside-Out Approach |
Managers can look inside the company at issues that are more rather than less important as a function of the company's strategy and business activities. |
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Outside-in approach |
Managers can look outside the company at issues the company can influence. |
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Outside-out approach |
Managers look at social issues in general terms to the extent that they're problematic, meaning they assess the social issues that come into focus as a function of the first two criteria(inside-out and outside-in). |
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The Organization |
Companies have a big impact on ethical decision making, such as through a culture that emphasizes generating revenues. |
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Successfully Implementing Code of ethics |
Employees will not take a code of ethics seriously unless the company reinforces the code by communicating that they're serious about enforcing it. |
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Communication |
To effectively communicate ethical standards, a company must repeatedly communicate the standards through various means. |
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Training |
People will need engaging training that inspires greater retention of the learning points to properly learn a company's code of ethics. |
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Reward and Recognition |
A company should reward and recognize employees that comply with its code of ethics. |
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Examples set by Top Managers |
Top managers can set an example of ethical behavior which has far reaching effects in a company such as damaging the best intentions and implementations of any corporate ethics program. |