Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability

Business Ethics
accepted principles of right or wrong governing the conduct of businesspeople.
Ethical Strategy
A course of action that does not violate a company’s businesses ethics
Foreign Corrupt Practices Act
U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions
Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
An Organization for Economic Cooperation and Development (OECD) convention that establishes legally binding standards to criminalize bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.
Ethical Dilemma
A situation in which there is no ethically acceptable solution
Personal Ethics
Generally accepted principles of right and wrong governing the conduct of individuals
Organizational Culture
The values and norms shared among an organization’s employees
Culture Relativism
The belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate.
Righteous Moralist
One who claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
Naïve Immoralist
One who asserts that if a manager of a multinational sees that firms from other nations not following ethical norms in a host nation, that manager should not either.
Utilitarian and Kantian Ethics
These hold that the moral worth of actions or practices is determined by their consequences
Kantian Ethics
The belief that people should be treated as ends and never as means to the ends of others
Rights Theories
A twentieth-century that recognizes that human beings have fundamental rights and privileges that transcend national boundaries and cultures
Universal Declaration of Human Rights
A United Nations document that lays down the basic principles of human rights that should be adhered to.
Veil of Ignorance
Everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents.
Difference Principle
Inequalities are justified if they benefit the position of the least-advantaged person.
Code of Ethics
A business’s formal statement of ethical priorities.
Stakeholders
The individuals or groups that have an interest, stake or claim in the actions and overall performance of a company
Internal Stakeholders
people who work for or own the business as employees, directors, and stockholders.
External Stakeholders
individuals or groups that have some claim on a firm such as customers, suppliers, and unions.
Moral Imagination
standing in the shoes of a stakeholder and asking how a proposal decision might impact that stakeholder.
Corporate Social Responsibility
Refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences.