Ch.4 – Ethical and Social Environment: Management

Ethics
An individual’s personal beliefs about whether a behavior, action, or decision is right or wrong.
Ethical Behavior
Behavior that confirms to generally accepted social norms.
Unethical Behavior
Behavior that does not confirm to generally accepted social norms.
Managerial Ethics
Standards of behavior that guide individual managers in their work.
Code of Ethics
A formal, written statement of the values and ethical standards that guide a firm’s action.
Organizational Justice
The perceptions of people in an organization regarding fairness.
Sarbanes-Oxley Act
A law passes in 2002 that requires CEo’s and CFO’s to personally vouch for the truthfulness and fairness of their firms’ financial disclosures.
Social Responsibility
The set of obligations an organization has to protect and enhance the societal context in which it functions.
Organizational Stakeholder
Person or organization who is directly affected by the practices of an organization and has a stake in its performance.
Obstructionist Stance
An approach to social responsibility in which firms do as little as possible to solve social or environment problems.
Defensive Stance
A social responsibility stance in which an organization does everything that is required of it legally, but nothing more.
Accommodative Stance
A social responsibility stance in which an organization meets its legal and ethical obligations but will also go beyond these obligations in selected cases.
Proactive Stance
A social responsibility stance in which an organization views itself as a citizen in a society and proactively seeks opportunity to contribute.
Regulation
Government’s attempt to influence business by establishing laws an rules that dictate what business can and cannot do.
Lobbying
The use of persons or groups to formally represent a company or group of companies before political bodies to influence the government.
Political Action Committee (PAC)
An organization created to solicit and distribute money to political candidates.
Legal Compliance
The extent to which an organization complies with local, state, federal, and international laws.
Ethical Compliance
The extent to which an organization and its members follow basic ethical standards of behavior.
Philanthropic Giving
Awarding funds or gifts to charities or other worthy causes.
Whistle-blowing
The disclosing by an employee of illegal or unethical conduct on the part of others within the organization.
Corporate Social Audit
A formal and thorough analysis of the effectiveness of a firm’s social performance.